Slide 17 of 30
Notes:
- The national inventory levels masks some potential regional issues.
- For gasoline, the Midwest region (PADD II) is in the worst situation, with gasoline inventories running nearly 13% below their 5-year average for this time of year and over 9% below where they were last year.
- For crude oil, the situation is not much better. Not only are crude oil inventories in the Midwest region over 8% below the 5-year average for this time of year, but the Gulf Coast region (PADD III), which provides a significant amount of the crude oil used in Midwest refineries, is nearly 8% below the 5-year average as well.
- The gasoline and crude oil inventory situation currently provides almost no flexibility to adjust to any transportation or refinery problems that may occur in the Midwest this summer. Thus, the situation is ripe for significant price volatility in the Midwest again this summer should any unforeseen problems occur. On the other hand, with last summer’s experience behind them, refiners that supply the Midwest region with gasoline should be a little better prepared to adjust should the situation worsen.