Slide 19 of 25
- When EIAís demand forecast is combined with its outlook for production and net imports, distillate stocks are projected to remain low for the rest of the year.
- The June 30 distillate fuel stock level is nearly 22% less than last year and the lowest end-June level since the late 1980s/early 1990s.
- It is unlikely refinery yields will be tilted to distillate fuel oil versus the normal pattern before the gasoline season is finished.
- Over the last 10 years, the average stock build from the end of June through end of November has been about 25 million barrels. We are forecasting about a 34 million barrel build, but even that does not get us into the normal band. The good news is that the ending December stock levels are projected to be higher than last Decemberís inventory levels.
- Still, as was just evidenced in the gasoline market, below average stock levels translate to increased potential for price volatility.