The Energy Information Administration (EIA) of the U.S. Energy Department (DOE) developed the Short-Term Integrated Forecasting (STIFS) model to generate short-term (up to 8 quarters), monthly forecasts of U.S. supplies, demands, imports, stocks, and prices of various forms of energy. The purpose of this report is to define the "other" petroleum products demand model in STIFS and describe its basic properties. This report documents the May 1998 version of the "other" petroleum products demand equations in STIFS.
This report is written for persons who want to know how short-term energy markets forecasts are produced by EIA. The report is intended as a reference document for model analysts, users, and the public.
Most discussion on petroleum product demand focuses on the five major products used in the transportation, residential, commerical and utility sectors: motor gasoline, jet fuel, distillate fuel, residual fuel, and liquefied petroleum gas. However, the third largest category of product demand is "other" petroleum products, which is made up of 14 different products and represents about 14 percent of total petroleum product demand (Table 1).
| Table 1. Demand for "Other" Petroleum Products (million barrels per day) | ||||||
| Product | Variable Name | 1993 | 1994 | 1995 | 1996 | 1997 |
| Aviation Gasoline Blend Components | ABTCPUS | < 0.001 | 0.003 | 0.003 | 0.004 | 0.005 |
| Asphalt and Road Oil | ARTCPUS | 0.474 | 0.484 | 0.486 | 0.484 | 0.501 |
| Crude Oil | COTCPUS | 0.010 | 0.009 | 0.007 | 0.007 | 0.002 |
| Petrochemical Feedstocks | FETCPUS | 0.580 | 0.602 | 0.572 | 0.592 | 0.686 |
| Petroleum Coke | PCTCPUS | 0.366 | 0.361 | 0.365 | 0.379 | 0.379 |
| Pentanes Plus | PPTCPUS | 0.197 | 0.201 | 0.200 | 0.210 | 0.195 |
| Still Gas | SGTCPUS | 0.653 | 0.657 | 0.647 | 0.654 | 0.660 |
| Unfinished Oils | UOTCPUS | - 0.186 | - 0.131 | - 0.151 | - 0.053 | - 0.050 |
| Remaining Miscellaneous Products | MZTCPUS | 0.342 | 0.341 | 0.335 | 0.338 | 0.354 |
| Note: Remaining Miscellaneous Products includes: finished aviation gasoline, kerosene, special naphthas, lubricating oils, waxes, and miscellaneous products (refer to Table 2 below). | ||||||
| Source: Energy Information Administration, Petroleum Supply Annual, Volume 2, DOE/EIA-0340/02, Table 3. | ||||||
A small volume of crude oil used directly as fuel (COTCPUS) is reported as "product supplied" in the Petroleum Supply Monthly. This volume has declined steadily since 1983 and averaged 2 thousand barrels per day in 1997. Demand has generally been reported only in Petroleum for Administration Defense District (PADD) V, the West Coast. Crude oil product supplied is assumed to be negligible through the forecast period.
COTCPUS = 0.0
Pentanes plus represents a mixture of hydrocarbons, mostly pentanes and heavier (isopentane, natural gasoline, and plant condensate). Pentanes plus demand (PPTCPUS) is estimated as a function of the refinery yield of motor gasoline (MGYLD), a time trend (TIME), and monthly dummies:
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Other variables (e.g., heating degree-days and industrial production index) were tested as proxies for demand shocks but were not found to be statistically significant.
Unfinished Oils includes all oils requiring further processing, except those requiring only mechanical blending (naphtha and lighter oils, kerosene and light gas oils, heavy gas oils, and residuum). Demand for unfinished oils (UOTCPUS) is estimated as a function of refinery inputs of unfinished oils (UORIPUS) and monthly dummy variables:
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Demand for aviation gasoline blend component had consistently been reported as less than 500 barrels per day, but has slowly started to grown in the last few years. Demand for aviation gasoline blend components (ABTCPUS) over the forecast period is assumed to be negligible:
ABTCPUS = 0.0
Petrochemical feedstocks are derived from petroleum for the manufacture of chemicals, synthetic rubber, and a variety of plastics. Petrochemical feedstock demand (FETCPUS) is estimated as a function of the industrial production index, chemicals and products sector (ZO28IUS). A motor gasoline price (MGWHUUSX) - propane price (PRTCUUS) ratio is included to capture substitution between petrochemical feedstocks and lighter products such as liquefied petroleum gases as raw materials in petrochemical processes:
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Petroleum coke is a by-product of the upgrading of the heaviest petroleum fractions (e.g., residual fuel oil) to more valuable lighter products in Coking units. Petroleum coke is produced as either sponge coke, needle coke, or fluid coke which vary primarily by particle size. About 65% of the coke produced in the U.S. is used as fuel. The remaining 35% is sponge coke that, when calcined, is sold as premium-grade coke used in the manufacture of aluminum anodes, furnace electrodes and liners, and shaped graphite products. Domestic petroleum coke demand (PCTCPUS) is estimated as a function of a time trend (TIME) and monthly dummy variables:
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The heaviest fraction of many crude oils includes natural bitumens or asphaltenes and are generally called asphalt. Demand for asphalt and road oil (ARTCPUS) is positively responsive to the level of industrial production (ZOTOIUS) and negatively related to cold weather, i.e., heating degree-day deviations from normal (ZWHDDUS) per day (ZSAJQUS):
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Still gas (also known as refinery gas) is any form or mixture of gas produced in refineries by cracking, reforming, and other processes. Still gas is produced as a by-product in the upgrading of heavy petroleum fractions to more valuable lighter products and is consumed internally as refinery fuel. Since the supply of still gas creates its own demand, still gas demand (SGTCPUS) is modelled as a function of refinery inputs of crude oil and the refinery yield or motor gasoline. For a given level of refinery crude oil inputs (CORIPUS), still gas production should be positively related to the refinery yield of motor gasoline (MGYLD).
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The remaining miscellaneous products, less than 15% of the total, is estimated under a subaggregate variable, MZTCPUS. The total volume of remaining miscellaneous products has declined steadily since 1985. While demand for lubricating oils, which makes up about 45 percent of this category, has been flat since 1984, demand for special naphthas has shown a significant decline, while kerosene has started to rebound from an extended decline (Table 2).
| Table 2. Remaining Miscellaneous Products (million barrels per day) | |||||
| Product | 1993 | 1994 | 1995 | 1996 | 1997 |
| Lubricants | 0.152 | 0.159 | 0.156 | 0.151 | 0.159 |
| Special Naphthas | 0.055 | 0.042 | 0.037 | 0.039 | 0.037 |
| Kerosene | 0.050 | 0.049 | 0.054 | 0.062 | 0.065 |
| Finished Aviation Gasoline | 0.021 | 0.021 | 0.021 | 0.020 | 0.022 |
| Waxes | 0.020 | 0.020 | 0.020 | 0.024 | 0.024 |
| Miscellaneous Products | 0.045 | 0.050 | 0.046 | 0.042 | 0.046 |
| Source: Energy Information Administration, Petroleum Supply Annual, Volume 2, DOE/EIA-0340/02, Table 3. | |||||
Special naphthas represent all finished products within the naphtha boiling range that are used as paint thinners, cleaners, or solvents. The steady decline in demand for special naphthas may reflect increasingly stringent environmental regulations or a greater participation in the market from the petrochemical sector.
Kerosene is used primarily used in space heaters, cooking stoves, and water heaters. The steady decline in kerosene demand likely reflects fuel switching (e.g., to natural gas or bottled propane) and greater demand for kerosene-type jet fuel.
Remaining miscellaneous products (MZTCPUS) is regressed against the industrial production index for the manufacturing sector (ZOMNIUS), weather (ZWHDDUS / ZSAJQUS), and time and monthly dummies:
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[Click here for Regression Results] |
File last modified: June 6, 1998
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