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Released on April 27, 2005 Dependency Data for the week ending April 22, which were released by EIA earlier today, showed that the U.S. imported 10.863 million barrels per day of crude oil, the third highest weekly average ever recorded, and the highest weekly average ever during the month of April. With U.S. oil consumption growing on average by a couple hundred thousand barrels per day each year while domestic crude oil production remains relatively flat, the additional supplies needed each year must come out of inventories, increased imports, or both. While inventories can be a temporary supply source, they cannot be drawn down indefinitely, so U.S. oil imports, both of crude oil and petroleum products, increase every year. There have been 28 weeks in which the United States imported at least 10.3 million barrels per day and all but 1 of those weeks has occurred since 2003. EIA’s short-term and its long-term forecasts both show an increasing dependence on crude oil imports to meet the expected increases in demand. But the United States is not only dependent on imports of crude oil, but also of gasoline. Data for the week ending April 22 showed that the U.S. imported over 1 million barrels per day of gasoline (including gasoline blending components) for the third week in a row. Only one other time in the past has the U.S. imported more than 1 million barrels per day of gasoline in three consecutive weeks (the weeks ending April 18, 25, and May 2, 2003). In fact, there have only been 34 weeks in which the United States has imported at least 1 million barrels per day of gasoline, and all of these have occurred since 2002 (the week ending April 26, 2002 was the first time this milestone was achieved). The number of weeks with gasoline imports over the 1-million-barrel-per-day level has grown from 8 in 2002 to 9 in 2003 and 13 last year. So far in 2005, there have been 4 such weeks and the beginning of the peak driving season is still over a month away. Of course, many might argue over whether this dependence on oil imports is good or bad. But given current market conditions, petroleum product prices would be even higher, at least in the short-term, if we imported less, as it would reduce the amount of oil and petroleum products that would be available, thus making each barrel or gallon even more costly than it currently is. Not only are imports needed to meet current demand, but imports can also help build inventories, as we saw happen last week. While crude imports were the third highest weekly average ever, crude oil inputs into U.S. refineries actually declined slightly. As a result, much of the increase in crude oil imports found its way into inventories, which built by 5.5 million barrels during the week ending April 22. Nevertheless, with refinery inputs expected to increase significantly over the summer as refiners try to produce as much gasoline as possible (while still needing imports to meet demand), crude oil inventories will likely be drawn down. So, for the time being, increases in oil imports help keep prices from being even higher – even if it flies in the face of the American sense of “rugged individualism.” U.S. Average Retail Gasoline Price Remains Steady Retail diesel fuel prices were up 3.0 cents last week to 228.9 cents per gallon, the tenth time in eleven weeks that prices have risen. Prices were mixed throughout the country, with the Gulf Coast seeing the largest increase of 5.1 cents to 223.1 cents per gallon. Average diesel fuel prices on the West Coast fell by 0.5 cent to reach 254.9 cents per gallon, which is 44.6 cents higher than this time last year. Propane Inventories Continue Higher Text from the previous editions of “This Week In Petroleum” is now accessible through a link at the top right-hand corner of this page. |
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