Energy Information Administration (EIA) contacts and trade press reports,
overall U.S. and global oil supplies appear to have been minimally impacted by
yesterday's terrorist attacks on the World Trade Center and the Pentagon.
Rumors of scattered closures of U.S. refineries, pipelines, and
terminals were reported, and Louisiana Offshore Oil Port operations were
partially suspended. While the NYMEX and New York Harbor were temporarily
closed, operations are expected to resume soon. Most, if not all petroleum
industry infrastructure is expected to resume normal operations today or in
the very near term. Prices at all
levels (where markets were open) posted increases yesterday, but many prices
fell today, as initial reactions subside.
This event occurred
against a background of already tight crude oil and product markets in the
U.S. and worldwide. Even prior to
yesterday's events, global oil markets were expected to continue tightening
through December, with WTI rising to the $28 to $29 level as the supply
surplus from earlier this year continues to erode.
Stocks were seen as drawing but remaining high enough relative to last
year that crude prices were likely to remain several dollars lower than the
very high prices seen a year ago. This,
of course, assumes normal weather, a sluggish economy, no Iraqi outages,
rising non-compliance by OPEC 10, and no unusual logistical or refinery
event (such as continued draws, outages, weather, or Mideast tensions) could
act as a catalyst to alert markets to the potential for very tight supplies
this winter, and oil prices could swing upward.
While yesterday's events could serve as such a catalyst, OPEC has
assured us that oil supplies will be maintained. Resuming full U.S. downstream
operations should also help to calm any initial wholesale and retail "kneejerk"
supply and demand fundamentals feature relatively low inventories for crude
oil and petroleum products, and moderate concern over potentially tight
supply/demand conditions during the coming winter.
As of the week ending September 7, EIA data show domestic crude oil
inventories 6% higher than a year ago, but below the seasonal average for
recent years. Distillate
inventories stand 9% above year-ago, and gasoline stocks nearly identical to
last year, but both are near the low end of their seasonal average range.
Relative inventory levels vary by product and region, with crude oil
and distillate stocks in the Midwest (PADD 2) one of the areas of most
concern. Refinery utilization is
reported at 95% of operable capacity.
have been scattered reports of sharply increasing prices at both wholesale and
retail levels for gasoline and diesel fuel.
At present, these appear to be relatively isolated panic reactions due
to buying and/or retailers fears of product outages, and are expected
to subside once it becomes clear that product flows will remain uninterrupted.
the bulk of energy trading operations are located outside of New York
(primarily around Houston), a number of large energy traders, are located in or very near the World Trade Center.
Most Houston-based operations and their off-exchange trading systems
are in operation today. Additionally,
the International Petroleum Exchanges (IPE) contract will serve as the worlds
benchmark, until the NYMEX is operating again.
Access to these important off-exchange markets and the IPE provide a
critical outlet for spot purchase and risk management transactions.
Specialized Services from NEIC
For Technical Problems
Energy Information Administration, EI 30|
1000 Independence Avenue, SW
Washington, DC 20585
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