Good, Better, and Best-A Comparison of Weekly, Monthly, and Annual Data
When buyers are confronted with a major purchase, they often weigh their options by considering whether to buy a good, better, or best product. All three have advantages and disadvantages. The same holds true when using Energy Information Administration (EIA) petroleum supply data because analysts have the option of using weekly, monthly, or annual data, depending on their needs.
As highlighted in the recently published article Accuracy of Petroleum Supply Data, oil data collected by the EIA showed an improvement in the accuracy of the 2006 data from initial estimates (weekly), to interim values (monthly), to final values (annual).
Weekly estimates are the first values available. Within five days of the close of the reference week (excluding holiday weeks), data are posted on EIA’s web site through the Weekly Petroleum Status Report (WPSR) or This Week in Petroleum (TWIP). These estimates enable EIA to provide timely, relatively accurate snapshots of the U.S. petroleum industry.
Each weekly survey is distributed to a sample of the corresponding monthly survey’s universe. EIA aims for a minimum 90-percent multi-attribute-cutoff sample from the respondents to the corresponding monthly survey. For example, for distillate fuel oil stocks, the weekly sample includes those respondents whose combined volumes of stocks for distillate fuel oil from refineries, bulk terminals, and pipelines constitute at least 90 percent of the total volume of distillate fuel oil stocks as reported in the corresponding monthly surveys.
Several quality control procedures are executed. Cell values determined to be unusual or inconsistent with other cell values are flagged. The validity of the value of each flagged cell is investigated. Some flagged values are verified by the respondent to be correct; other flagged cells are corrected; and the remaining flagged values are referred to as unresolved. Nonrespondent and unresolved flagged data are imputed using an exponentially-smoothed mean of the respondents’ historical data.
While EIA’s Petroleum Supply Monthly (PSM) doesn’t elicit the publicity that the release of weekly data does, it provides detailed monthly data which can be a valuable tool for analysts. The monthly surveys encompass the universe of respondents comprising six key points along the petroleum production and supply path: refineries, bulk terminals, product pipelines, crude oil stock holders, importers, and blenders.
During the period of data editing for monthly data, either the respondent or EIA staff may identify an error. If the respondent discovers an error, the EIA representative for a particular survey is notified and the value is corrected. If EIA’s edits identify an unusual value, an EIA representative will determine if the value is correct or incorrect by calling the company and/or reviewing historical data.
Within 60 days of the close of the reference month, all of the interim monthly data are published in the PSM on the Internet. Additionally, preliminary company-level imports data are released electronically between the 7th and 10th of each month.
Two major factors contribute to the PSM values being more accurate than the monthly-from-weekly (MFW) estimates: (1) the greater length of time between the close of the reference period and the publication date of the PSM; and, (2) most weekly values are based on company’s operational records whereas PSM values are generally extracted from company’s accounting systems; the latter being more accurate. The greater length of time allows more in-depth review of the data by the respondents and EIA.
Lastly, about six months after the end of the reference year, final monthly values, reflecting resubmissions, are published in the Petroleum Supply Annual (PSA).
Below are two graphs depicting the MFW, monthly, and annual data series for distillate fuel oil imports and ending stocks.
The monthly import data was within an average 1.6 percent of the final annual data while the MFW generally trended lower than either the monthly or annual data, averaging about 12.3 percent change versus annual data.
The monthly ending stock data was within an average 0.3 percent of the final annual data. The MFW inventory data generally trended lower than either monthly or annual data, averaging 2.7 percent change from the annual data.
For imports, one reason for the variability in the MFW values is that shipments do not always arrive during the week in which they were expected. This has a greater impact when the end of the month occurs in the middle of the week. For the monthly distillate fuel oil imports, all but one of the 2006 PSM interim values underestimated the final PSA values. Most of the MFW values underestimated imports compared to PSA values, although four months (February, July, August, and December) in 2006 overestimated annual data.
The distillate stock series show that the stock values for both MFW estimates and PSM interim values are very close to the final PSA values. Most of the 2006 MFW estimates for distillate fuel oil stocks underestimated the final PSA values although the March and September 2006 estimates were above the final value. Most of the 2006 PSM interim values for distillate fuel oil stocks also underestimated the final PSA values.
Shifts in the relationship between weekly-based, monthly data, and annual data illustrate that it is important to understand the tradeoffs of each data series to better interpret the petroleum supply situation. Dependence on only one set of the available petroleum information could skew analysis, especially during recent years when oil markets have been extremely volatile. So, choosing whether to use the good, better, or best petroleum data depends on the objective of the analysis.
For example, while the weekly series provides timely estimates of product supplied, recent monthly reports have revised these early estimates downward. March 2008 data, released earlier this week, estimated total petroleum data demand at 19.7 million barrels per day, over 600 thousand barrels per day lower than the weekly estimate. Over 500 thousand barrels per day of this revision resulted from much higher monthly estimates of exports. The EIA does not collect export data. They are gathered by the U.S. Bureau of the Census on a monthly basis and are received by EIA approximately seven weeks after the close of the reporting month. The weekly estimates for exports are projections based on past monthly data. Because the export data are highly variable, especially when, as occurred in the first quarter of 2008, oil markets are tight, weekly model-based estimates often do not adequately capture their full magnitude.
West Coast Gasoline Price Soars Past $4 - Diesel Price Surpasses $5 in California
For the ninth consecutive week, the U.S. average retail price for regular gasoline climbed to another all-time high. The price shot up by 14.6 cents to 393.7 cents per gallon. During the last two weeks alone, prices have climbed by 21.5 cents. Prices rose in all regions, with the East Coast jumping by 14.2 cents to match the U.S. average at 393.7 cents per gallon. The average price in the Midwest went up 15.2 cents to 395.1 cents per gallon. The average price in the Gulf Coast jumped 14 cents to 382.9 cents per gallon, the lowest of any region. The price in the Rocky Mountain region went up the most, surging 16.5 cents to hit 385.1 cents per gallon. Once again, the average price for the West Coast was the highest in the Nation, shooting up by 14.6 cents to break through the $4 mark at 402.9 cents per gallon. The average price in California also shot past $4, hitting 409.9 cents per gallon, a jump of 14.7 cents.
During the past week, the national average diesel price continued its upward momentum, surging up by 22.6 cents to 472.3 cents per gallon. Prices rose in all regions by more than 20 cents, and during the past three weeks, the national average price shot up by 57.4 cents. The average price on the East Coast increased by 23.5 cents to reach 477.9 cents per gallon. In the Central Atlantic portion of the East Coast, the price went up by 23.1 cents to 491.3 cents per gallon, 203.1 cents above a year ago. In the Midwest, the price went up the least of any region, but still jumped by 20.4 cents to hit 466.7 cents per gallon. The average price in the Gulf Coast was 467.3 cents per gallon, an increase of 23 cents. In the Rocky Mountain region, the average price grew by 21.1 cents to 465.3 cents per gallon. On the West Coast, the average price soared 27.3 cents, the most of any region, to hit 488.3 cents per gallon. The average price in California shot past $5 for the first time by gaining 29 cents to land at 502.7 cents per gallon.
Propane Build Continues Strong
Following on the heels of the prior week’s robust stockbuild, propane inventories continued strong last week with a 1.6 million-barrel gain that put inventories at an estimated 35.7 million barrels as of May 23, 2008. The strong stockbuilds over the past few weeks propelled inventories about 0.6 million barrels ahead of the same period last year. Regionally, East Coast inventories were boosted higher by 0.9 million barrels last week, partly as a result of higher imports. While the Midwest reported a moderate loss in inventories last week that measured 0.4 million barrels, inventories in the Gulf Coast moved higher by 1.1 million barrels. The Rocky Mountain/West Coast region remained relatively flat during this same time. Propylene non-fuel use inventories fell last week by 0.1 million barrels to account for a smaller 6.0 percent share, compared with the prior week’s 6.7 percent share.