EIA: This Week in Petroleum - 06 January 2021 - eng Избранное

Среда, 06 января 2021 23:58

Crude oil prices in 2020 were the lowest in more than 15 years

In the first half of 2020, responses to the COVID-19 pandemic led to steep declines in petroleum demand, highly volatile crude oil markets, and rising U.S. and global liquid fuels inventories. In January 2020, the first case of COVID-19 in the United States was confirmed, and on March 13, the President declared a national emergency. West Texas Intermediate (WTI) crude oil futures prices fell to less than zero during the day on April 20 and 21, the first time the price for the WTI futures contract fell lower than zero since trading began in 1983. Brent crude oil futures prices did not fall lower than zero, but nonetheless declined to $19 per barrel (b) on April 21, the lowest nominal price since February 7, 2002 (Figure 1)—although in real terms the price was much lower. The second half of 2020, however, was characterized by relatively stable prices as demand began to increase, global production fell—primarily because members of the Organization of the Petroleum Exporting Countries (OPEC) and partner countries (OPEC+) cut production—and inventories fell. Across all of 2020, the price for WTI averaged $39/b, the lowest in nominal terms since 2003, and the price for Brent averaged $43/b, the lowest in nominal terms since 2004.

Figure 1. Crude oil front-month futures prices

As a result of responses to the pandemic, demand for petroleum products fell sharply in early 2020. In April, global demand for liquid fuels fell to 80.6 million barrels per day (b/d), the lowest level since May 2004 and 20.3 million b/d lower than April 2019 demand. In the United States, the four-week rolling average gasoline demand (measured by product supplied) fell to 5.3 million b/d on April 24, down 44% year on year. Jet fuel demand reached an annual low of 558,000 b/d (four-week rolling average) on May 29 (down 69% from the same period in 2019). Distillate demand did not fall as much as gasoline or jet fuel demand, falling 20% from the same period in 2019 to an annual low of 3.0 million b/d (four-week rolling average) on May 1 (Figure 2).

Figure 2. U.S. product supplied of motor gasoline, distillate, and jet fuel

Responding to the drop in demand in the first part of 2020, U.S. refiners curtailed operations, and between March 13 and May 8, four-week average gross refinery inputs fell 20% to 13.1 million b/d, the lowest level since September 2008 when Hurricanes Gustav and Ike disrupted refineries along the U.S. Gulf Coast. Crude oil production in the United States did not decline as quickly as refinery runs. In April, U.S. crude oil production averaged 12.0 million b/d, down just 0.7 million b/d (6%) from March. From April to May, crude oil production fell 2.0 million b/d (17%), the largest monthly decline in U.S. Energy Information Administration (EIA) data, which dates back to 1920. The steep decline in demand and refinery runs, combined with shallower declines in crude oil production, contributed to a significant increase in oil inventories (Figure 3). U.S. commercial crude oil inventories reached a record high of 540.7 million barrels on June 19, up 87.0 million barrels (19%) since the national emergency was declared on March 13. In the crude oil storage hub of Cushing, Oklahoma, crude oil inventories rose by 27.0 million barrels (70%) between March 13 and May 1, reaching an annual high of 65.4 million barrels, 83% of the working storage capacity.

Figure 3. U.S. total commercial crude oil inventories

In the first half of 2020, EIA estimates global liquid fuels stocks built at an average of 6.5 million b/d and reached a high of 19.7 million b/d in April, the largest stock build in EIA data, which dates back to 1993. EIA does not collect data on global petroleum inventory levels, but data on inventories are available for countries in the Organization for Economic Cooperation and Development (OECD) and can indicate global trends. OECD crude oil and liquid fuels inventories began increasing rapidly in March and reached a record high of 3.2 billion barrels in July. In light of the weak demand and rising inventories globally, on April 9, OPEC+ agreed to reduce their crude oil production beginning in May.

OPEC crude oil production averaged 24.3 million b/d in the second half of 2020, down from 27.0 million b/d in the first half of the year and 4.6 million b/d less than production in the second half of 2019. U.S. crude oil production was also relatively low in the second half of 2020. From July through the week ending January 1, 2021, U.S. crude oil production averaged 10.8 million b/d (based on the four-week average), down from 12.4 million b/d in the first half of the year and 1.7 million b/d lower than the second half of 2019.

In the second half of 2020, petroleum demand recovered while global crude oil production remained low, resulting in an estimated 2.8 million b/d draw on global liquid fuels stocks, and contributing to OECD inventories falling to 3.0 billion barrels in December. In the United States, commercial crude oil stocks fell to 485.5 million barrels the week ending January 1, 2021, down from the record high of 540.7 million barrels reached on June 19, 2020.

Supported by increasing petroleum product demand and crude oil stock draws, crude oil prices rose in the second half of 2020. The price of WTI climbed to $40/b on July 1 and from July through August traded within a range of $4/b. In November 2020, crude oil prices rose as markets responded to the positive news of several potential vaccines for COVID-19, and WTI and Brent closed the year at $49/b and $52/b, respectively.

U.S. average regular gasoline and diesel prices increase

The U.S. average regular gasoline retail price increased nearly 1 cent to $2.25 per gallon on January 4, almost 33 cents lower than the same time last year. The East Coast price increased more than 2 cents to $2.22 per gallon, and the West Coast price increased nearly 2 cents to $2.81 per gallon. The Midwest price decreased by nearly 2 cents to $2.15 per gallon, and the Rocky Mountain price decreased by less than 1 cent, remaining virtually unchanged at $2.19 per gallon. The Gulf Coast price remained unchanged at $1.93 per gallon.

The U.S. average diesel fuel price increased nearly 1 cent, remaining virtually unchanged at $2.64 per gallon on January 4, almost 44 cents lower than a year ago. The East Coast and Gulf Coast prices increased nearly 1 cent to $2.67 per gallon and $2.40 per gallon, respectively, the Midwest price increased nearly 1 cent, remaining virtually unchanged at $2.59 per gallon, and the West Coast price increased less than 1 cent to $3.12 per gallon. The Rocky Mountain price decreased by less than 1 cent, remaining virtually unchanged at $2.59 per gallon.

Propane/propylene inventories decline

U.S. propane/propylene stocks decreased by 2.4 million barrels last week to 72.8 million barrels as of January 1, 2021, 2.0 million barrels (2.7%) less than the five-year (2016-2020) average inventory levels for this same time of year. Gulf Coast, Midwest, Rocky Mountain/West Coast inventories decreased by 1.5 million barrels, 1.1 million barrels, and 0.4 million barrels, respectively. East Coast inventories increased by 0.6 million barrels.

Residential heating fuel prices increase

As of January 4, 2021, residential heating oil prices averaged $2.46 per gallon, more than 2 cents per gallon above last week’s price but nearly 66 cents per gallon lower than last year’s price at this time. Wholesale heating oil prices averaged $1.60 per gallon, almost 1 cent per gallon below last week’s price and nearly 57 cents per gallon lower than last year.

Residential propane prices averaged almost $2.01 per gallon, nearly 4 cents per gallon above last week’s price and less than 1 cent per gallon above last year’s price. Wholesale propane prices averaged more than $0.89 per gallon, almost 6 cents per gallon higher than last week’s price and more than 23 cents per gallon above last year’s price.

For questions about This Week in Petroleum, contact the Petroleum Markets Team at 202-586-4522.


Retail prices (dollars per gallon)

Conventional Regular Gasoline Prices Graph. Residential Heating Oil Prices Graph. On-Highway Diesel Fuel Prices Graph. Residential Propane Prices Graph.
 Retail pricesChange from last
 01/04/21WeekYear
Gasoline 2.249 0.006 -0.329
Diesel 2.640 0.005 -0.439
Heating Oil 2.460 0.021 -0.659
Propane 2.007 0.037 0.002

Futures prices (dollars per gallon*)

Crude Oil Futures Price Graph. RBOB Regular Gasoline Futures Price Graph. Heating Oil Futures Price Graph.
 Futures pricesChange from last
 12/31/20WeekYear
Crude oil 48.52 NA -14.53
Gasoline 1.408 NA -0.341
Heating oil 1.476 NA -0.585
*Note: Crude oil price in dollars per barrel.
Markets were closed on 1/1/2021 and 12/25/2020.

Stocks (million barrels)

U.S. Crude Oil Stocks Graph. U.S. Distillate Stocks Graph. U.S. Gasoline Stocks Graph. U.S. Propane Stocks Graph.
 StocksChange from last
 01/01/21WeekYear
Crude oil 485.5 -8.0 54.4
Gasoline 241.1 4.5 -10.5
Distillate 158.4 6.4 19.4
Propane 72.777 -2.369 -10.006
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