Noesis: Crude Oil, Gasoline and Diesel Stock and Price Forecast



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Weekly Report Crude oil prices the past year have had a profound effect on Independent U.S. producers and many wonder what the U.S. policy toward U.S. producers really is. These concerns are expressed in a recent article sent in by Catherine Christoffel. To read it click HERE. Refiners are tanking up on crude oil, which is an indication that they believe the price of crude oil will be staying up, at least for awhile. Crude oil inventory levels rose from 340.8 to 344.6 million barrels. And import rates increased from 7.7.8 to 9 million barrels per day. The catch is that the maximum crude oil storage capacity in the U.S. is about 352.6 million barrels. At the current fill rate, refiners will only be importing extra crude for about 2 to 3 weeks. After that, crude oil purchases will drop back to match demand -- which should be about 8.3 million barrels per day ( at current crude oil prices). Full tanks and slack demand in the past have led to lower refiner posted prices for crude oil. Given no other changes in the supply-demand system, the price of oil, in general, will go down. However, if OPEC successfully demonstrates reduced output from its oil fields, it is possible that they can stem the decrease in prices and then maintain them with continued management of their oil supply.

Refineries are operating at 90.7 percent utilization. This time last year, refineries were operating at 94.4 percent. Continued shut downs among California refineries are the primary reason for the low utilization. There is word now that the Mobil refinery in Torrence, CA is at least partially down due to problems with an alkylation unit. Based on pricing today, California refineries are favoring light, sweet crudes by widening the gap between heavier and lighter crude price postings. Except for the operational problems in PADD V, production of products appears to be normal for the season and supplies are plentiful. Refiners are working off extra inventories of distillate and product storage is returning to a more reasonable operational balance. Gasoline prices continue to rise across the U.S., although prices in the West have far exceeded those east of the Rocky Mountains. When crude oil prices level out, most fuel prices across the states will level out too, then competition should bring them back down a bit. California, and other PADD V area fuel prices are still driven by a shortage of fuel, so prices will continue to be very high relative to the rest of the country.

EIA U.S. Refining Data
Inputs and Imports are 4-week Avg
	Input/Output	Million BPD	Imports	Million BPD	Inventory	Million BBL
Week	Mar 19	Mar 26	Mar 19	Mar 26	Mar 19	Mar 26
Crude Oil	14.4	14.3	7.9	8.7	340.8	344.6
Gasoline	7.8	7.8	0.445	0.458	219.8	214.5
Distillate	3.2	3.1	0.216	0.249	126.9	122.1
Resid	0.7	0.7	0.256	0.266	39.2	38.4

World crude oil prices reported by EIA as of March 26, 1999: Saudi Arabian Lt (34 API) - $13.15, Nigerian Bonny Light (37 API) - $13.65, Indonesia Minas (34 API) $13.50, UK Brent (38 API) - $13.82, Venezuela Tia Juana Light (31) $13.22, Mexico Maya (22 API) - $10.86, Mexico isthmus (33) $13.11, China, Daqing (33) $13.35, and Russia Urals (32 API) $12.82.

Posted prices for crude oil as of April 5, 1999 were: Scurlock, West Texas Intermediate (WTI) $14.25; Louisiana Lt. Sweet Onshore $13.25, Oklahoma Sweet $14.25.

Refiner posted prices on April 5, 1999 were: WTI (36 API) $16.25, Louisiana Lt. Sweet Onshore $15.75.

West Coast Refinery posted prices as of April 5: Kern River (13 API) $10.25; Kettleman Hill (34 API) $13.05 and Wilmington (17 API) $10.25.

For graphs of crude oil prices, check out the new ones at the California Energy Commission: crude price graphs.

East Coast Gasoline and Heating Oil

East of the Rockies By March 29, 1999 gasoline prices had increased as follows: PADD I - $1.00, PADD II - $1.08, and $1.00 in PADD III.

Diesel prices on March 29, 1999 were up: PADD I - $1.03, PADD II - $1.02, and PADD III - $1.01

FORECAST: It appears that gasoline and diesel prices are just following the price of crude oil. Demand is still soft and it is expected that competition among refiners will bring product prices back down soon, although they are not likely to return to recent low levels until after Memorial Day.

Rocky Mountain Gasoline and Diesel

The price of regular gasoline increased to $1.12 per gallon and the price of diesel increased to about $1.08 per gallon.

In an unusual twist, it appears that prices in PADD V are effecting prices in PADD IV, suggesting that refiners in the Rocky Mountain area may be shipping gasoline to PADD V.

West Coast Gasoline and Diesel Forecast

West Coast - Things are still not good on the West Coast. Operating refineries are being pushed to their limits, which seems to be resulting in some additional problems. There are reports that shipments of gasoline are on the way from the Gulf Coast. An additional special report will be released after EIA and California Energy Commission data are released this week.

The CEC has posted an AMOCO Refinery Flow Chart that will make a good addition to your files: Refinery Flow Chart.

By March 29, 1999 the average price of (reg-mid-premium) gasoline in PADD V had increased to $1.41 per gallon. The price of Regular increased to $1.37 per gallon.

The average price of diesel in PADD V increased from $1.16 to $1.23 and Californian's are now paying $1.39 per gallon.

FORECAST: So far, there is no end in sight to the price increases.

For a good graph of gasoline and diesel prices since 1997, take a look at the EIA graph.

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Many readers write in and ask for more data or specific information. You are encouraged to explore the Index Page and the Links Page. The links listed have been especially selected to get you to data and information which will supplement the information you find on the oil-gasoline.com site. They are all great sites! For EIA data used in these forecasts, select the Energy Information Administration link. Once there, select Petroleum. Then select "Weekly Petroleum Status Report" The TEXT version gives you basic data. Or scroll down and select pdf, text or html files for tables and graphs. There is a wealth of information on the EIA site. With the analytical tools you've picked up by reading the oil-gasoline.com reports, you should be able to use most of the data! As always, if you have questions, send email. contact George Clemen at oil-gasoline.com

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