EIA: This Week in Petroleum - 30 December 2020 - eng Избранное

Среда, 30 декабря 2020 21:48

This Week in Petroleum: Best of 2020

The following This Week in Petroleum articles were originally published throughout 2020. New feature articles of This Week in Petroleum will return on January 6, 2021. The retail price and inventory paragraphs, charts, and tables accompanying the feature article have been updated to reflect data from the latest Weekly Petroleum Status Report for the week ending December 25, 2020.

Published March 25, 2020: Oil market volatility is at an all-time high

Figure 1. West Texas Intermediate crude oil futures prices

Crude oil prices have fallen significantly since the beginning of 2020, largely driven by the economic contraction caused by the 2019 novel coronavirus disease (COVID19) and a sudden increase in crude oil supply following the suspension of agreed production cuts among the Organization of the Petroleum Exporting Countries (OPEC) and partner countries. With falling demand and increasing supply, the front-month price of the U.S. benchmark crude oil West Texas Intermediate (WTI) fell from a year-to-date high closing price of $63.27 per barrel (b) on January 6 to a year-to-date low of $20.37/b on March 18 (Figure 1), the lowest nominal crude oil price since February 2002.

Published on April 22, 2020: WTI crude oil futures prices fell below zero because of low liquidity and limited available storage

Figure 2. May 2020 West Texas Intermediate futures contract

On Monday, April 20, 2020, New York Mercantile Exchange (NYMEX) West Texas Intermediate (WTI) crude oil front-month futures prices fell below zero dollars per barrel (b)—at one point, trading at -$40.32/b (Figure 2)—and remained below zero for part of the following trading day. Monday marked the first time the price for the WTI futures contract fell below zero since trading began in 1983. Negative prices in commodity markets are very rare, but when they occur they typically indicate high transactions costs and significant infrastructure constraints. In this case, the WTI front-month futures contract was for May 2020 delivery, and the contract was set to expire on April 21, 2020. Unless they have made other arrangements ahead of time, market participants that hold WTI futures contracts to expiration must take physical delivery of WTI crude oil in Cushing, Oklahoma. Typically, most market participants close any futures contracts ahead of expiration through cash settlement in order to avoid taking physical delivery, and only about 1% of contracts are physically settled. The extreme market events of April 20 and April 21 were driven by several factors, including the inability of contract holders to find other market participants to sell the futures contracts. In addition, in this case, the scarcity of available crude oil storage meant several market participants sold their futures contracts at negative prices, in effect paying a counterparty to close out of the contracts.

Published on June 3, 2020: March saw major declines in U.S. demand for petroleum products

Figure 3. U.S. gross inputs into refineries

On March 13, 2020, the President declared a national emergency in the United States in response to concerns regarding the 2019 novel coronavirus disease (COVID-19) outbreak. Reduced economic activity and stay-at-home orders aimed at slowing the spread of COVID-19 led to a sharp decrease in demand for petroleum products. Because refiners responded faster to reduced demand than crude oil producers, crude oil inventories increased as refinery runs fell. Despite reflecting only one-half of a month under the declared national emergency, the U.S. Energy Information Administration’s (EIA) March Petroleum Supply Monthly (PSM) data show the early effects of the COVID-19 mitigation efforts.

U.S. gross inputs into refineries fell by 670,000 barrels per day (b/d) (4.1%) from February to March to average 15.8 million b/d, the lowest monthly level since October 2015 (Figure 3). However, the refinery input decreases were not the same in every region of the United States. Gross inputs in the U.S. Gulf Coast (Petroleum Administration for Defense District, or PADD, 3), home to more than half of U.S. refining capacity, increased by 43,000 b/d (0.5%) from February to March, likely as a result of increased runs after maintenance in February. However, the year-over-year change also indicates relatively strong refinery runs in the Gulf Coast, with March 2020 runs averaging 193,000 b/d more than 2019 levels. Gross inputs in the Gulf Coast may have remained elevated compared with the U.S. average because refiners in the Gulf Coast produce petroleum products for consumption in other areas of the country and for export.

Published July 29, 2020: COVID-19’s impact on global commercial jet fuel demand has been significant and uneven

Figure 4. Global commercial passenger flights (year-to-date 2020)

Although COVID-19 mitigation efforts have reduced demand for all transportation fuels, demand for jet fuel has likely declined the most in relative terms. For instance, in the United States—the world’s largest jet fuel consumer—average jet fuel product supplied (a proxy for consumption) in June 2020 was 41% of what it had been in June 2019, compared with 86% for gasoline and 88% for diesel fuel, according to the July edition of the U.S. Energy Information Administration’s (EIA) Short-Term Energy Outlook (STEO).

To estimate global changes in jet fuel consumption, EIA recently began using data from aviation company Cirium that detail each scheduled commercial passenger flight since January 2019, including the type of aircraft flown and its route. Using data on each flight’s origin and destination, EIA calculated the great-circle distance (which measures the straight-line distance between two points along the earth’s surface) for each flight. EIA then increased that distance by 10% per flight to compensate for the excess distance airplanes fly on average relative to the shortest, optimized path. After factoring in the average fuel efficiency of each flight’s aircraft (including fuel used during takeoff, landing, and taxiing), EIA estimated the volume of jet fuel consumed by each flight and summed these flights to estimate the volume of jet fuel consumed globally by commercial passenger flights (Figure 4).

Published August 19, 2020: U.S. refineries respond to record-low demand by decreasing inputs to certain downstream units

Figure 5. U.S. inputs to atmospheric distillation units (ADU) and downstream units difference from five-year (2015–19) average

From March 2020 (when a national emergency was declared) to April 2020, U.S. demand for gasoline, jet fuel, and diesel fuel decreased. Jet fuel and gasoline demand (as measured by product supplied) dropped the most, decreasing by 50% and 25%, respectively. Diesel fuel demand decreased less than gasoline and jet fuel demand, falling 10% from March to April. Stay-at-home orders and travel restrictions affected gasoline and jet fuel demand more than diesel fuel demand. The decline in gasoline and jet fuel consumption was the result of consumers travelling less. But because diesel fuel is used extensively in trucking, increased demand for home delivery and distribution of necessary goods and services likely supported the volumes of distillate product supplied.

Refiners responded to the changes in transportation fuel demand by decreasing refinery runs, with the largest decreases seen in units focused on gasoline production. Gross inputs to atmospheric distillation units (ADU) in April 2020 were 3.4 million barrels per day (b/d) (21%) lower than the five-year (2015–19) average, and gross inputs to ADUs in May 2020 were 3.6 million b/d (21%) lower than the five-year average (Figure 5). Compared with ADUs and other downstream units, inputs to catalytic crackers, associated with gasoline production in a refinery, had the second-largest change on a volume basis from the five-year averages in April and May, averaging 1.6 million b/d and 1.4 million b/d lower, respectively. On a percentage basis, the decrease in inputs to catalytic crackers was the largest out of all units; inputs in April decreased 32% from the five-year average, and inputs in May decreased 29% from the five-year average.

U.S. average regular gasoline and diesel prices increase

The U.S. average regular gasoline retail price increased nearly 2 cents to $2.24 per gallon on December 28, almost 33 cents lower than the same time last year. The Midwest price increased more than 5 cents to $2.17 per gallon, the West Coast price increased nearly 2 cents to $2.79 per gallon, the East Coast price increased nearly 1 cent to $2.20 per gallon, and the Rocky Mountain price increased less than 1 cent, remaining virtually unchanged at $2.19 per gallon. The Gulf Coast price decreased less than 1 cent, remaining virtually unchanged at $1.93 per gallon.

The U.S. average diesel fuel price increased nearly 2 cents to $2.64 per gallon on December 28, 43 cents lower than a year ago. The Midwest price increased nearly 3 cents to $2.59 per gallon, the West Coast price increased nearly 2 cents to $3.11 per gallon, the Gulf Coast increased more than 1 cent to $2.39 per gallon, and the East Coast and Rocky Mountain prices each increased nearly 1 cent to $2.66 per gallon and $2.59 per gallon, respectively.

Propane/propylene inventories decline

U.S. propane/propylene stocks decreased by 6.5 million barrels last week to 75.1 million barrels as of December 25, 2020, 2.3 million barrels (3.0%) less than the five-year (2015-19) average inventory levels for this same time of year. Gulf Coast, Midwest, East Coast, and Rocky Mountain/West Coast inventories declined by 3.5 million barrels, 1.6 million barrels, 1.0 million barrels, and 0.3 million barrels, respectively.

Residential heating fuel prices increase

As of December 28, 2020, residential heating oil prices averaged more than $2.44 per gallon, nearly 2 cents per gallon above last week’s price but almost 64 cents per gallon lower than last year’s price at this time. Wholesale heating oil prices averaged nearly $1.61 per gallon, almost 2 cents per gallon below last week’s price and more than 55 cents per gallon lower than last year.

Residential propane prices averaged more than $1.97 per gallon, 3 cents per gallon above last week’s price but nearly 4 cents per gallon below last year’s price. Wholesale propane prices averaged almost $0.84 per gallon, less than 1 cent per gallon lower last week’s price but nearly 13 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
Gasoline 2.243 0.019 -0.328
Diesel 2.635 0.016 -0.434
Heating Oil 2.442 0.019 -0.635
Propane 1.972 0.030 -0.039

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
Crude oil 48.23 -0.87 -13.49
Gasoline 1.379 -0.017 -0.368
Heating oil 1.490 -0.023 -0.560
*Note: Crude oil price in dollars per barrel.
Markets were closed on 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
Crude oil 493.5 -6.1 63.6
Gasoline 236.6 -1.2 -5.9
Distillate 152.0 3.1 18.3
Propane 75.146 -6.449 -7.042
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