Storage Capacity Data Planned for Release in November
Stocks of crude oil, motor gasoline, distillate fuel, and other petroleum products are currently ample, with inventories in many regions well above the 5-year average range for this time of year. This abundant supply provides a buffer against disruptions such as refinery and pipeline outages, storms, and unexpected local demand fluctuations. Inventories also provide a measure of the balance between demand and new supply (production and imports), and are watched by analysts as an indicator of market tightness and price movements. For example, This Week In Petroleum covered the influence of Cushing stock levels on West Texas Intermediate (WTI) crude oil spot prices on June 16, 2010.
EIA collects inventory data at refineries, terminals, pipelines, and other facilities. During times when inventories are very high, EIA often receives questions regarding the amount of storage capacity available, but until this year, EIA had only collected storage capacity at refineries. However, most petroleum product inventories are held at terminals, aand terminals are where most seasonal and discretionary volumes reside. As part of EIA's Energy and Financial Markets Initiative, EIA has begun collecting storage capacity on a semiannual basis (March and September) for crude oil and products at the Petroleum Administration for Defense (PAD) District and sub-PAD District levels. In addition, EIA has also begun collecting data on crude oil storage capacity at Cushing, Oklahoma, the delivery point for WTI oil futures contracts traded on the New York Mercantile Exchange.
Because the availability of storage capacity can affect near-term market expectations, the addition of storage capacity data is expected to make markets more transparent. It will also provide information that is useful for emergency planning and assessment of market disruptions from events such as hurricanes. The new storage data will include above ground and underground storage and will be measured as both shell storage (the design capacity of the tank) and working storage (shell storage net of tank bottoms and the safe-fill level).
Product storage capacity can show seasonal shifts if product tanks are used for more than one type of product. EIA will assign capacity to a given product type by what product is in the tank at the report time (March 31 or September 30). Thus, a tank that is holding motor gasoline on March 31 will be counted towards gasoline capacity. However, if that tank has been switched to store distillate fuel by September 30, it will be counted as distillate capacity in that report. Information is also being collected to determine if reported capacity is being used by third parties, which provides an indication of how much capacity is available for lease to multiple parties versus that held by a single company for its own use.
The first collection of additional storage capacity data was initiated in June, but that data will not be published. As is typical with new data collections, EIA and respondents use the initial collections to familiarize respondents with new survey forms and smooth out reporting and submission issues that may arise. The first storage capacity data will be published on the EIA website in November with September data (as of end-of-the-month). Going forward, storage capacity will be published twice per year: in November (reflecting storage capacity as of September 30) and in May (reflecting storage capacity as of March 31).
Retail Gasoline Price Drops 4 Cents
The U.S. average retail price for regular gasoline decreased over four cents to $2.70 per gallon but was 8 cents per gallon higher than this time last year. Prices were down throughout the country except for a slight gain to $2.81 per gallon in the Rocky Mountains. The East Coast price declined four cents to $2.64 per gallon while the Midwest recorded the largest price decrease, more than five cents, to settle at $2.63 per gallon. The Gulf Coast price lost a nickel to average $2.56 per gallon. The West Coast price remained the highest in the Nation after dropping over two cents to $3.08 per gallon, and California prices declined two and a half cents to $3.14 per gallon.
The retail diesel fuel price lost two cents from last week to end at $2.96 per gallon, but was $0.29 per gallon above last year. Although the Rocky Mountain average moved a half cent higher to $3.02 per gallon, all other regional prices were lower than last week. The East Coast price fell two and a half cents to average $2.95 per gallon. The Midwest decreased more than 2 cents to $2.93 per gallon and Gulf Coast prices were down by over a penny to $2.92 per gallon. West Coast prices remained the highest in the country, falling a cent and half to settle at $3.11 per gallon, while California prices decreased the same amount to $3.17 per gallon.
Propane Inventories Continue to Grow
Inventories of propane in the U.S. posted another build last week, climbing 1.1 million barrels to end at 60.9 million barrels. The Gulf Coast regional inventories rose by 0.7 million barrels. The Midwest region added 0.2 million barrels of propane stocks, while the East Coast and Rocky Mountain/West Coast regions each grew by 0.1 million barrels. Propylene non-fuel use inventories represented 4.2 percent of total propane/propylene stocks.
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