Short-Term Energy Outlook Model Documentation: Petroleum Products Supply Module
May 1, 2013
Overview
The petroleum products supply module of the Short‐Term Energy Outlook (STEO) model provides forecasts of petroleum refinery inputs (crude oil, unfinished oils, pentanes plus, liquefied petroleum gas, motor gasoline blending components, and aviation gasoline blending components) and refinery outputs (motor gasoline, jet fuel, distillate fuel, residual fuel, liquefied petroleum gas, and other petroleum products). Table 1 shows the top four product yields from U.S. refineries for the last 5 years. U.S. refineries have historically been optimized to produce motor gasoline.
The STEO model contains over 2,000 equations, of which about 450 are estimated regression equations. The regression equations are estimated and the forecast models are solved using Eviews Econometric Software (Quantitative Micro Software, LLC). The frequency of the STEO model is monthly and the model equations are used to produce monthly forecasts over a 13‐to‐24 month horizon (every January the STEO forecast is extended through December of the following year).
The petroleum products supply module, which is documented in this report, contains 28 equations, of which 14 are estimated regression equations. Some input variables to the petroleum products supply module are exogenous, coming from other modules in the STEO model (e.g., crude oil and petroleum product prices) or forecasts produced by other organizations (e.g., weather forecasts from the National Oceanic and Atmospheric Administration).