A Horrible EIA Oil Inventory Report

[ClueByFour]

Actually, that is a myth as well. The "research" that supposedly proved that ethanol consumes more energy that it produces has been debunked a number of times.

No, it has not. Nobody has yet been able to conclusively prove that studies that arrive at similar outcomes to the Pimentel study at Cornell are not accurate--unless you assume incredible decreases in the actual energy inputs needed to grow and harvest corn.

That said, producing ethanol from corn is very inefficient. Ethanol from sugar would be price competitive with gasoline if we got rid of all the sugar price supports.

The same process repeats itself eventually with sugarcane (as the Brazillians are finding out). In order to produce enough of it to make any decent amount of ethanol, you ultimately kill the ground by robbing it of both carbon and other nutrients.

 

[NewHampshire Black Bears]

It would be nice if we could have built refineries all these years, but the NIMBY's and environmentalists have ensured that we are in the situation we are in right now.

=========================================================

Yes yes, of course you are right.

And I'm sure that the little A$$ HOLE(in the WHITE HOUSE)bears NO responsibility.

For example,(bush), Picking a fight/(NAME calling), with Hugo Chavez/Venezuala/Citgo, has'nt affected the "price at the pump", has it ???


Hillary 08'

NH/BB's

 

[TheWatcher]

=========================================================

Yes yes, of course you are right.

And I'm sure that the little A$$ HOLE(in the WHITE HOUSE)bears NO responsibility.

For example,(bush), Picking a fight/(NAME calling), with Hugo Chavez/Venezuala/Citgo, has'nt affected the "price at the pump", has it ???


Hillary 08'

NH/BB's

Careful, if you dont like NEO-CONS, stop the Bush bashing.........

Im not republican or democrat....seen too much to fall for that, but i can tell you, be careful what you wish for....

 

[Prince of PAWOBs]

Of course not, since the high price helps prevent shortages.

Which would you rather have? Artificially low prices (like price controls) and corresponding gas lines and shortages? Like in 1973?

Or would you rather pay a little more and be assured that the gas station has plenty of gas for sale?

I vote for the latter. And I hope gas goes higher. Much higher.

Price gouging? A classic complaint of whiners who don't like the fact that market prices fluctuate.

It's not 1973. The population has grown a bit. Truck transportaion has outpaced rail in this country. The SUV phenomenon has encouraged wealthy people to purchase gas guzzlers as a status symbol. The world continues to see upheaval as it has for the last 30+ years in the same countries that provide a majority of US crude oil. Other developing countries are devouring crude oil at a faster rate than the US, and they have been increasing their use over the last 30 years, not just the last five, or two. These are just a few examples. I'm sure I could find more.

Whiners? Hmm...I'm pretty sure you weren't referring to me. Gouging? Absolutely. The new economically conservative generation knows when to take profits before their preferred US administration hits the wall. Market fluctuation? An easy excuse for the masses who aren't paying attention or can't wrap their minds around economics.

Politicians are starting to bow to constituent pressure in the short term concerning windfall profits. FWAAA, you better hope the furor dies down. Otherwise, you may have to sell all of your petroleum stock before oil company profits hit the wall, too. Aww! Or course, you could be some tree-hugging hippie or patent holder for a new ethanol-running engine for SUV's, but I doubt that is the case. Hippies are relatively gentle in word and deed.

Maybe you work for the coal industry?

 

[700UW]

The village idiot that is missing in Texas can easily propose the windfall profit tax just as Jimmy Carter did when gas prices when sky high as did the oil company's profits.

 

[BoeingBoy]

Since autofixer was kind enough to get this week's thread started, I'll just add the report for the week ending 4/14/06 on to what's already been said....

Domestic Crude Production (4 week average) was 5,055,000 bbls/day, down 8.% YoY but up 25,000 from last week's report.

Net Crude Imports (4 week average) were 9,793,000 bbls/day, down 2.7% YoY.

Input to refineries (4 week average) was 14,667,000 bbls/day, down 4.1% YoY but up 19,000 from last week's report. Refineries operated at 86.2% of capacity for the week.

Net refined product imports (4 week average) were 1,904,000 bbls/day, up 16.7% YoY.

Refined product supplied (4 week average) was 20,572,000 bbls/day, up 0.5% YoY but down 52,000 from last week's report.

Crude oil stocks in storage on 4/7/06 was 345,200,000 bbls, up 6.2% YoY and down 0.2% WoW.

Jet fuel stocks on 4/7/06 were 41,800,000 bbls, up 10.0% YoY and 1.2% WoW.
- East coast was 10,600,000 bbls - down 200,000
- Midwest was 8,200,000 bbls - down 200,000
- Gulf coast was 12,900,000 bbls - up 800,000
- Rocky Mountain was 700,000 bbls - unchanged
- West coast was 9,400,000 bbls - up 200,000

Jet fuel production (4 week average) was 1,482,000 bbls/day (1,354,000 commercial & 128,000 military).
- East coast was 92,000 bbls/day (all commercial)
- Midwest was 206,000 bbls/day (200,000 commercial)
- Gulf coast was 742,000 bbls/day (653,000 commercial)
- Rocky Mountain was 21,000 bbls/day (15,000 commercial)
- West coast was 421,000 bbls/day (394 commercial)

Jet fuel imports (4 week average) was 254,000 bbls/day.
- East coast was 106,000 bbls/day
- West coast was 148,000 bbls/day
- Remaining regions imported no jet fuel

Jet fuel supplied (4 week average) was 1,636,000 bbls/day, down 3,000 bbls/day from last week's report but up 1.2% YoY.

On Thursday, 4/13/06 (markets were closed Friday), spot prices were:

NY Harbor jet fuel - $2.0951, up 10,25 cents WoW
Gulf Coast jet fuel - $2.0751, up 9.12 cents WoW
Los Angeles jet fuel - $2.1300, up 12.00 cents WoW
WTI Cushing crude oil - $69.53/bbl, up $2.51 WoW

Bloomberg is showing WTI-Cushing @ $72.00 as of 2:05pm on 4/20/06.

Something new from Platt's and IATA - jet fuel spot prices for regions of the world. This is also as of the end of the previous week - 4/14/06 in this case:

Asia & Oceania - $2.008/gal
Europe & CIS - $2.012/gal
Middle East & Africa - $1.966/gal
North America - $2.090/gal
Latin & Central America - $2.097/gal

-----
Platts Market Commentary

On a weekly basis the IATA/Platts jet fuel index rose for the week ending April 14 with the Global Index posting a rise of 4.60%. On a monthly basis the global index was also assessed up, and posted an increase 8.09%. The majority of markets posted significant rises with highest being Asia & Oceania which posted an increase of 4.74% compared to week-ago levels. On a month-ago basis the greatest increase was seen in North America where jet values rose by 11.38%.

The jet CIF cargo market in North America has seen prices rising on both the East and the West coast due in the main to turnarounds at several key locations. The rise in East coast jet prices resulted in several cargoes being diverted away from Europe to North America.

Jet values in Singapore have seen consistent increases over the past month as a combination of turnarounds at local refineries and un-planned outage at the TonenGeneral 156,000 b/d crude distillation unit at its Sakai refinery last week. The surge in Singapore values has seen Persian Gulf jet prices rise which consequently means that the arbitrage of cargoes from the Persian Gulf in to Northwest Europe is no longer economically viable.
-----

EIA's 'This Week in Petroleum" discusses primarily gas prices this week (they don't see sustained $3.00/gal for the national average), but discusses some points mentioned already in this thread:

-----
Why doesn’t EIA see $3 per gallon as a fait accompli? To understand why, a look at the main factors behind high prices may be helpful. First, a larger-than-normal amount of refinery capacity is currently offline, reducing the production of gasoline. Three refineries on the Gulf Coast shut down by last fall’s hurricanes are only now reportedly beginning to return to operation, or soon will be. Additionally, some refineries that were not damaged by the hurricanes deferred planned fall maintenance until this spring, so as to maximize production immediately following the hurricanes. However, this means that we now have refineries undergoing previously scheduled spring maintenance, plus those that had deferred maintenance from last fall. Compared to weekly data last year for the similar period (the four weeks ending April 15, 2005), gasoline production for the most recent four-week period is down 457,000 barrels per day, while gasoline demand is up slightly compared to last year. As a result, finished gasoline inventories have been pulled down sharply, dropping more than 20 million barrels over the past four weeks, despite large volumes of imports. However, as these refineries return to full operation, gasoline production should increase, thus adding much-needed supply into the system.

Second, other factors influencing gasoline prices exhibit more uncertainty over the near-term future. Crude oil prices have risen to above $71 per barrel for West Texas Intermediate, which is higher than EIA had expected. Some of this price rise stems from an increase in the demand for inventory as refiners and others buy more crude oil now to put into inventories as a physical hedge against the possibility of supply disruptions later this year. While geopolitical concerns are likely to remain for the time being, at some point, inventories may be built sufficiently to provide enough of a hedge for some refiners, which could help halt the rise in crude oil prices. At the same time, this may occur just as refiners need more crude oil to supply the refineries returning from maintenance, so it remains highly uncertain which direction crude oil prices will head over the next several weeks, thus making it difficult to determine the impact crude oil prices might have on gasoline prices.

Third, the other major factor influencing gasoline prices is the transition from MTBE reformulated gasoline (RFG) to ethanol RFG in some parts of the country, most notably much of the East Coast and major cities in Texas. How smoothly this transition occurs will have a significant impact on the near-term path of gasoline prices. Already there are signs of some problems getting sufficient supplies in a timely fashion in parts of Virginia, mostly the Tidewater and Virginia Beach areas, with some problems also experienced around Richmond. However, unless problems related to this transition become more widespread, it may not have much impact on average monthly retail gasoline prices for the country as a whole. This transition was discussed in the January 5, 2006 issue of This Week in Petroleum and in a subsequent EIA report Eliminating MTBE in Gasoline in 2006 issued in February 2006.
-----

Once again, the usual chart moved from last week's report for convenience. While not included in the chart, this month's average spot prices thru Tuesday, 4/18/06, are:

New York Harbor $2.0494
Gulf Coast $2.0254
Los Angeles $2.0627
WTI-Cushing $68.16

View attachment 4788

Jim

 

[SpinDoc]

How is it "gouging" to charge what the market will bear? If I make widgets, shouldn't I be able to charge as much as I can for them?

Bear:

The problem with the "petroleum widget" is that it is a major driver of the U.S. economy, and if the price rises too high, other sectors of the economy will tank, and then we will see another recession.

A fair market price for a barrel of oil is around $25 to $30. Refined gasoline and diesel fuel should not cost more than $1.09 per gallon. We are getting shafted by the Saudis and our other "friends" in the desert, not to mention Wall Street gamblers who continue to bid the price of oil higher for personal gain. Sure, the speculators are making huge paper gains from an irrational market, but look out when the price of everything else goes way up to offset ridiculous energy costs. All of the profits they are making will have to be spent on other goods which they also use.

The oil companies have us over a barrel, so to speak. There is no meaningful competition among them, because they don't have to compete. They have a captive market for their products and they are in collusion to keep the cost of refined product high. The first thing that happened after many of the major oil companies were allowed to merge was to remove excess refining capacity. They need to put that "excess" capacity back into the system, because there is a serious shortage now, but they won't do that because they like their egregious profits, and the power to take us all for a ride.

 

[FWAAA]

A fair market price for a barrel of oil is around $25 to $30. Refined gasoline and diesel fuel should not cost more than $1.09 per gallon.

Hilarious!

Ok, I'll play along. A fair market price for a walkup transcon in coach is $200 roud trip. And a walkup First Class transcon RT should not cost more than $400.

Why? Because I declared it so, that's why. B)

It takes all kinds to have a discussion, and you certainly make it colorful.

 

[Bear96]

Bear:

The problem with the "petroleum widget" is that it is a major driver of the U.S. economy, and if the price rises too high, other sectors of the economy will tank, and then we will see another recession.

Yup, that makes a jump in oil prices more newsworthy than a jump in the price of widgets. But it doesn't immunize oil from basic supply and demand rules. And lamenting over the fact that the oil market is not a pure-as-snow example of unfettered capitalism is an exercise in futility. It is what it is, unless you can somehow wave a magic wand and have refineries pop up all over the U.S. overnight. (And even that will be a short-term solution which will only last until about when the number of automobiles in China begins to surpass that in the U.S., when we're back to the old supply of crude problem.)

As long as enough people are willing to pay the prices, those evil oil companies will keep charging them. Solution: the U.S. consumer must consume less. Don't buy that SUV. Live near where you work, instead of in that huge McMansion on five or ten acres in exurbia. Build, then actually use, public transport.

You call it a "problem." If you mean that in a negative way, sure, that is one way to look at it. I prefer looking at it as a problem in a positive and challenging way. Nothing some good old fashioned American ingenuity and creativity can't solve.

Yes these will be major, and in some cases unpleasant in the short term, changes for many Americans who for so long have lived in the fantasy world of $0.99/gal gasoline. (I think I saw those prices only two short years ago, in the summer of 2004, IIRC.) Those days are over. The realities of a rapidly developing China and India will see to it.

Oh, and note to airline employees: The transformation of the industry is not yet complete. Oil prices at these levels over the long term will surely mean, ultimately, higher fares = fewer people travelling = fewer airline employees. And for those that remain, airlines will be looking to cut costs everywhere else to be able to fill those fuel tanks, including in employee compensation. Plan accordingly. It will not be pretty.

 

[FWAAA]

Bear96: I agree completely.

In related news, oil closed at over $75/bbl today:

http://www.marketwatch.com/News/Story/Stor...hoo&siteid=yhoo

Won't take too long for these prices to bleed out the weak carriers.

 

[delldude]

Of course not. Let's build the refineries in those godforsaken Arab deserts or other 3rd world countries far away and then tanker the refined product across the ocean instead of crude oil. We don't need no stinkin' refineries - we just want the product.

doesn't quite work that way.....logistics....

would be cool trick shipping gasoline 12,000 miles without any major incidents....could be done but on occasion would be some neat pyrotechnics from time to time.

 

[TheWatcher]

Of course not. Let's build the refineries in those godforsaken Arab deserts or other 3rd world countries far away and then tanker the refined product across the ocean instead of crude oil. We don't need no stinkin' refineries - we just want the product.

I assuming the product you are speaking of is the gasoline? Theres a hell of a lot more we get from oil other than gasoline........

 

[BoeingBoy]

Actually, we import quite a bit of refined product....

Four week average ending 4/14/06:

Gasoline 907,000 bbls/day
Jet fuel 254,000 bbls/day
Distillate fuel oil 125,000 bbls/day
Residual fuel oil 254,000 bbls/day
Propane/Propylene 137,000 bbls/day
Other 1,159,000 bbls/day

While not a refined petroleum product, we also imported 338.5 billion cu ft of natural gas in Jan06 (the latest I can find quickly), of which 39.5 billion cu ft was LNG brought in by ship.

Jim

 

[TheWatcher]

Actually, we import quite a bit of refined product....

Four week average ending 4/14/06:

Gasoline 907,000 bbls/day
Jet fuel 254,000 bbls/day
Distillate fuel oil 125,000 bbls/day
Residual fuel oil 254,000 bbls/day
Propane/Propylene 137,000 bbls/day
Other 1,159,000 bbls/day

While not a refined petroleum product, we also imported 338.5 billion cu ft of natural gas in Jan06 (the latest I can find quickly), of which 39.5 billion cu ft was LNG brought in by ship.

Jim

Whatever numbers you find, always add just a little bit more. The actual numbers for imports are always higher....cant go into much detail about it, because i dont want the black helicopters circling over my home

 

[BoeingBoy]

I don't doubt it - from what I understand, the monthly report updates the "estimates" of the weekly report which is where those numbers come from.

Jim