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This Week In Petroleum EIA Home > Petroleum > This Week In Petroleum |
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Released on July 10, 2002 Are Stocks Going Up or Down? Total petroleum demand in June was 0.4 percent higher than in June 2001, according to the weekly survey forms. This is the first month of year-over-year growth since November 2001. With many analysts expecting positive demand growth in the second half of this year, even a small increase in June is a positive sign and reinforcement of those expectations. However, last July and August, demand was 19.9 million barrels per day and 20.2 million barrels per day, respectively, so demand will need to increase above the 19.6 million barrels per day averaged in June to show positive growth over July and August last year. But even if demand does not reach these very high levels this month or next, prospects for strong demand in the last four months of the year are good. While total petroleum demand has not shown positive year-over-year growth until June, gasoline demand has shown positive growth each month this year and June was no exception. Gasoline demand set a record for the month, averaging over 8.9 million barrels per day, which is nearly 2.8 percent higher than in June 2001. This level is also right in line with what would be expected given retail prices, and Gross Domestic Product levels. While EIA’s Short-Term Energy Outlook is currently forecasting gasoline demand in July and August to average 9.0 million barrels per day, we could easily envision scenarios in which gasoline demand in these two months would average 9.1 million barrels per day or more. If gasoline imports do not return to record levels and demand does in fact average 9.1 to 9.2 million barrels per day during July and August, gasoline stocks could fall toward the lower end of the normal range by the end of summer, thus possibly setting the stage for a small, but significant price increase somewhat ahead of the Labor Day holiday. U.S. Retail Gasoline Price Slides After Holiday Weekend The U.S. average retail price for regular gasoline fell 1.0 cent last week, ending at 138.2 cents per gallon as of July 8. This price is 5.5 cents per gallon lower than last year. Prices were down throughout most of the country, with the largest decrease occurring in the Midwest, where prices fell 2.7 cents to end at 137.2 cents per gallon. The Rocky Mountain region saw an increase, where prices rose 0.3 cent to end at 140.3 cents per gallon. Prices have remained relatively flat over the past few months, but there could be price increases ahead if we see a decrease in gasoline imports and steady or rising gasoline demand. Reports of strengthening gasoline demand in Europe, problems with a crude oil pipeline from Canada, and decreases in crude oil exports from Iraq all could lead to a tightening gasoline market. Retail diesel fuel prices increased by 0.5 cent per gallon to a national average of 129.4 cents per gallon as of July 8. Propane Posts Average June Build U.S. inventories of propane grew by 8.1 million barrels during June 2002, a level that matches the five-year average build for this month. At the midpoint of the summer build season, propane inventories stood at an estimated 60 million barrels as of June 30, 2002, the third highest level since 1982. Consequently, U.S. inventories of propane continue to be slightly above the upper end of the average range for this time of year. Regional stock builds during June were above average in the East Coast and Gulf Coast regions but were below average in the Midwest during this same period. While Midwest inventories remained within the average range for June, East Coast and Gulf Coast inventories continued above the average range for this same period. Next Propane Inventory Release Propane inventory data for July 31, 2002, will be published in the August 7, 2002 issue of “This Week In Petroleum.” |
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