Petroleum Report For Week Ending 9/23/05

[BoeingBoy]

U.S. crude oil imports averaged 9.7 million barrels per day last week, down 139,000 barrels per day from the previous week. Over the last four weeks, crude oil imports have averaged over 9.5 million barrels per day, a decrease of 315,000 barrels per day from the comparable four weeks last year.

U.S. commercial crude oil inventories (excluding those in the SPR) dropped by 2.4 million barrels from the previous week. At 305.7 million barrels, U.S. crude oil inventories remain above the upper end of the average range for this time of year.

U.S. crude oil refinery inputs averaged over 14.6 million barrels per day during the week ending September 23, down 709,000 barrels per day from the previous week's average, as many Gulf Coast refiners shut down late last week as a precaution before Hurricane Rita.

Refineries operated at 86.7 percent of their operable capacity last week (capacity temporarily lost is not subtracted from operable capacity). Gasoline and distillate fuel production declined, averaging nearly 8.6 million barrels per day and 3.7 million barrels per day, respectively.

Total product supplied over the last four-week period has averaged 20.2 million
barrels per day, or 2.0 percent less than averaged over the same period last year. Over the last four weeks, motor gasoline demand has averaged over 8.8 million barrels per day, or 2.8 percent below the same period last year.

Kerosene-type jet fuel demand is up 0.9 percent over the last four weeks compared to the same four-week period last year.

To give an idea of the impact of Katrina & Rita, domestic crude oil production for the 4 weeks ending 9/23/05 is down 14.7% from the same period last year.

On to the numbers:

Spot prices for jet fuel.....9/23......9/16......9/09......9/02......8/26......8/19......8/12......8/05
New York Harbor.........$2.0700 $1.9450 $2.0100 $2.2750 $1.9100 $1.9550 $1.9550 $1.7430
Gulf Coast...................$2.1750 $1.9050 $1.9488 $2.2050 $1.8675 $1.9450 $1.9450 $1.7230
Los Angeles................$2.0000 $1.8850 $1.9500 $2.2538 $2.0000 $2.0975 $2.0975 $2.0050

Spot prices for crude......9/23.....9/16.....9/09.....9/02.....8/26.....8/19.....8/12.....8/05
WTI Cushing................$64.67 $62.91 $64.21 $66.91 $66.71 $66.71 $62.44 $60.71
Brent...........................$62.17 $60.48 $62.62 $65.95 $67.26 $67.26 $60.73 $59.77

Current crude prices:

WTI Cushing...$65.35 (@ 10:03 on 9/28/05 per Bloomberg)
Dated Brent....$62.18 (@ 10:28 on 9/28/05 per Bloomberg)
NYMEX............$65.40 (@10:08 on 9/28/05 per Bloomberg)

Finally, average spot prices of jet fuel by month (by quarter once the quarter is over):

Delivery point....1Q05......2Q05......Jul05.....Aug05.....Sep05*......3Q05*
NY Harbor..... $1.4861 $1.5833 $1.6859 $1.90.24 $2.1329 $1.8994
Gulf Coast..... $1.4400 $1.5649 $1.6647 $1.8744 $2.1254 $1.8797
Los Angeles.. $1.5228 $1.7008 $1.7525 $2.0272 $2.0449 $1.9424

*thru 9/27/05

As in the last few reports, here's a chart showing the effects of the hurricanes on jet fuel spot prices per barrel starting on 8/26/05 (before Katrina) and ending 9/27/05.

View attachment 3385

Jim

 

[B737 MECHANIC]

doug say we can make it work at 50.00 now what

 

[BoeingBoy]

Well, the POR says we can make it with $57-$58 per bbl oil - if you take it at face value. However, that was put together before Katrina, when the so-called "crack spread" - no, not the plumber working under the sink but the difference between the cost of a bbl of oil and jet fuel - was about $13. That spread is now $27-$40 depending on delivery point for jet fuel in bulk. In other words, the price of jet fuel is equivalent to $80-$90 per bbl crude using pre-Katrina standards.

Jim

 

[BoeingBoy]

From today's "This week in petroleum" report from EIA:

A Significant Blow, But Not a Knockout

With Hurricane Rita making landfall near the Beaumont/Port Arthur, TX and Lake Charles, LA refining centers, 7 refineries, amounting to 1.7 million barrels per day of refinery capacity (10 percent of U.S. refinery capacity), were directly in the path or very near the path of the hurricane. Damage to some of these refineries, and the lack of electrical power supply to others, is preventing their immediate return to service. Combined with the 5 percent of refinery capacity near the New Orleans area that was still out following Hurricane Katrina, as much as 15 percent of U.S. refinery capacity could be out for at least another couple of weeks.

EIA estimates that these refinery outages amount to about 1.3 million barrels per day of lost gasoline production, over 700,000 barrels per day of lost distillate fuel production, and nearly 400,000 barrels per day of lost jet fuel production. While some of the lost production from inoperable refineries can be made up from increased production from unaffected refineries and increased product imports, the rest of it will likely be made up from additional draws from inventories and lower demand due to higher prices.

For now, the critical factor is how much of the refining capacity that is still shut down can return to service over the next few weeks. With the data for the week ending September 23 showing gasoline, distillate fuel, and crude oil inventories all at or above the average range for this time of year, it appears that inventories, along with increased product imports, may be sufficient to make up for lost production due to refinery outages for a brief period. However, the longer these refineries remain shut down, the more serious the situation becomes, particularly with the heart of the winter season just a few months away.

Jim

 

[robbedagain]

While I was refueling my car at a Redners Gas station this afternoon, a cashier came out and shouted "Get Your Fuel Now Because It will be Going Sky High". I am not sure how high but the way she put it, she must know more than me. How will that affect the New US Airways if theirs goes up say a few more cents or even a dollar?

 

[usair_begins_with_u]

How will that affect the New US Airways if theirs goes up say a few more cents or even a dollar?

Its going to kick the new US air in the nutz, is what its going to do... No way these guys show a profit with out liquidating assets, or other bizarre accounting moves.

 

[aafsc]

According to Jetwire (an internal AA daily newsline), on Tues, 9/27 a barrell of jetfuel exceded $112 a barrel.

 

[BoeingBoy]

I saw that on the AA forum. BTS reported that the Gulf coast spot price was $105 per bbl on the 27th, so maybe Jetwire was talking about "in the plane" prices or delivered to Dallas or Chicago.

Jim