EIA data reviewed last week revealed a drop in crude oil inventories over a 7 day period that was difficult to explain when considering the import and crude still feed rates. Some readers suggested the problem might be explained by the EIA announcement that it had estimated demand and production incorrectly in its forecasts. Actually, EIA's problems in their own forecasts should have no bearing on the actual data reflected in their Weekly Petroleum Status Report (WPSR), which is the data used for this forecast page. EIA refinery data is reported by refiners. There are two possible sources of errors -- the companies reporting the data and the people at the EIA who enter the data into the computers. . .

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Data released this week presents an interesting challenge! Refiners increased the amount of crude oil imported from 8.780 to 8.949 million bpd -- that's an additional 1.18 million barrels for the week. They also reported decreasing inputs of crude oil into crude stills from 14.496 to 14.424 million bpd -- that's a decrease of 504 thousand barrels for the week. Refineries are operating steadily at about 91% utilization.

To continue March 8, 1999 Report - Click Here

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Refiners continued to take advantage of low crude oil prices and added 3 million barrels to their inventories by increasing imports to from 8.4 to 8.8 million bpd. Refinery activity decreased slightly overall because the two major refining centers, the Gulf Coast and the West Coast, decreased inputs to crude stills. Overall, refinery utilization dropped from 92.8 to 91.8 percent.

World prices for crude oil fluctuated in unusual directions relative to each other . . .

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Inputs to refineries increased from 14.3 to 14.6 million bpd, or 92.8% of operable capacity. However, the 4-week moving average decreased from 14.4 to 14.3 million bpd, which is probably a more realistic picture of the trend. Imports of crude oil decreased from 8.4 to 8.25 million bpd. The combination of decreased imports and increased feed to refineries resulted in a decrease of 1.7 million in crude oil inventories, which ended up at 331.7 million barrels

For the next few weeks, continued slack demand in the U.S. will contribute to a slow decline of crude oil prices. However, there is still room to add crude oil to U.S. inventories and the sooner those purchases begin, the sooner prices will stabilize. For a look at the recent history of key crude oil prices, check out the Maguire chart at SMU and the chart at Berry Petroleum Online.

Current conditions and data still suggest that the NOESIS long term forecast for crude oil prices remains the same.

To continue February 22, 1999 Report - Click Here

Crude oil stocks increased by 600,000 barrels. Refining rates were just 75,000 barrels per day (bpd) higher than last week at 14,332, or 90.8 % utilization. Since crude oil imports were about the same at 8.6 million bpd, it appears that refineries operated at a steady level, despite almost full tanks of product everywhere.

Gasoline production continued at a record pace, up from 7.79 to 7.9 million bpd. Inventory levels increased 5.1 million barrels to a record level of 228.2 million barrels, partially due to sustained import levels at about 477 thousand bpd. Even if imports had dropped to zero, inventories would have increased by 1.8 million barrels, which means refineries were running 257 thousand bpd above demand. . .

To continue February 16, 1999 Report - Click Here

Each crude oil produced is a unique combination of hundreds of chemicals and metals. Considering the wide variation in the qualities of crude oil, it is amazing that the refining industry is so efficient at making a few standard fuels that are of consistent enough quality to allow the design and operation of fuel consuming machines. . . .

To continue January 25, 1999 Report - Click Here

Worldwide crude oil production is holding at the maximum achievable level right now (i.e., OPEC and others have not achieved the necessary lower production level to pull down world inventories). As a result, the slow down of refining rates during February in the U.S. will ripple backwards through the upstream market. . . .

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Many readers ask about API Gravity. The API Gravity of a crude oil is inversely related to the specific gravity. . . .
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"Unless significant cutbacks occur in the world production of crude oil, the price of crude oil will remain low throughout 1999 and into the year 2000.
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Crude oil prices continued downward this past week. The following figure shows actual domestic first purchase crude oil prices (what producers receive) and the same prices adjusted for inflation to 1995 equivalent prices. (prices from EIA, deflater from CEC) To continue December 7, 1998 Report - Click Here

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