Released on January 2, 2003
(Next Release at 1:00 pm EST on January 8, 2003)

Venezuelan Strike Impact Seen in Latest Weekly Petroleum Data
U.S. weekly petroleum data for the week ending December 27, 2002 left no doubt that the impact from strikes in Venezuela has hit U.S. shores. U.S. crude oil imports averaged 7.6 million barrels per day last week, the lowest average since the week ending January 28, 2000. However, in order to keep refinery throughput at relatively high levels, since refinery margins are relatively good right now, refiners drew upon inventories to partially make up for the reduction in imports. For the week ending December 27, 2002, U.S. crude oil inventories were at 278.3 million barrels, a decline of 9.1 million barrels from the previous week and 33.7 million barrels less than at the same time last year. In PADD III (Gulf Coast), where much of the Venezuelan crude oil imports are typically unloaded, crude oil inventories were down by 8.7 million barrels. And although the sources of weekly crude oil imports are very preliminary and thus not published, it does appear that crude oil imports from Venezuela last week were almost nonexistent. Clearly, the loss of crude oil imports from Venezuela has impacted the U.S. oil market. As detailed below, retail prices gasoline, diesel fuel, heating oil, and propane all increased last week.

But, as mentioned above, there are a lot of variables that can change this outcome and the next few weeks are likely to be very interesting. It appears that 2003 is coming in as a lion. But we’ll have to wait to see how loud the roar is.

Retail Gasoline and Diesel Fuel Prices Increased Significantly Last Week
The U.S. average retail price for regular gasoline rose for the third week in a row last week, increasing by 4.0 cents per gallon as of December 30 to end at 144.1 cents per gallon. This price is 34.5 cents per gallon higher than a year ago. Prices throughout the country were up, with the largest increase occurring in the Midwest, where prices rose 5.8 cents to end at 145.0 cents per gallon.

Retail diesel fuel prices increased 5.1 cents per gallon last week, rising to a national average of 149.1 cents per gallon as of December 30. Diesel fuel prices are not expected to soften significantly during the coming months, as distillate fuel inventories have dropped below the normal range this winter and are expected to remain low into the beginning of 2003. Retail diesel prices were up throughout the country, with the largest price increase occurring on the East Coast, where prices rose by 5.8 cents per gallon to end at 150.6 cents per gallon.

Low Stocks and Cold Weather Continue to Force Heating Fuels Prices Higher
Residential heating fuel prices continued their increase for the period ending December 30, 2002. The average residential heating oil price was 140.7 cents per gallon, up 4.4 cents per gallon from the previous week. Residential propane prices also continued to move upward by 2.1 cents per gallon from 123.1 to 125.2 cents per gallon. Heating oil prices are 24.8 cents per gallon higher than last year at this time while residential propane prices are 12.5 cents per gallon higher than one year ago. Wholesale heating oil prices increased 5.2 cents per gallon this week, to 95.0 cents per gallon, while wholesale propane prices increased from 61.1 to 62.3 cents a gallon, up 1.2 cents per gallon.

Winter Storms Only Dent Propane Inventories
U.S. inventories of propane reported the smallest weekly decline since late November despite winter storms that swept through major regions of the nation last week. The modest 0.6 million barrel stock draw pushed U.S. inventories of propane down to an estimated 52.2 million barrels as of week ending December 27, 2002, a level that remains well within the average range of inventories for this time of year. Preliminary estimates also show the December stock draw totaled about 8.9 million barrels, a level that was more than 16 percent below the 5-year monthly average of about 10.6 million barrels.

Regional inventories were mixed with East Coast inventories rebuilding with a 0.5 million barrel gain, followed with declines in the Midwest and Gulf Coast regions that measured 0.4 million barrels and 0.7 million barrels, respectively. East Coast and Midwest inventories climbed back to within their respective average ranges last week while inventories in the Gulf Coast remained at the upper limit of the average range during this same time.