Released on April 16, 2003
(Next Release on April 23, 2003)

Weekly Data on U.S. Crude Oil Imports
Recently, there has been a lot of interest regarding the origins of U.S. crude oil imports. Disruptions in crude oil production in Venezuela, Nigeria, and Iraq have focused attention on U.S. imports from these countries, while reports of Saudi Arabia dramatically increasing production has generated interest in U.S. imports from that country as well. While EIA’s weekly survey on crude oil imports includes a section asking for the source of the imports, the sample of respondents was not selected to provide statistically complete coverage. In addition, there are some respondents each week that, while listing their total crude oil imports for the week, neglect to list the country of origin. Thus, EIA considers these data to be not accurate enough to publish actual country specific volumes. However, in comparing this information to our final monthly data, we do feel that the information contained in the weekly survey is sufficient to give us a qualitative feel for the origins of U.S. crude oil imports. Therefore, occasionally, EIA has made qualitative statements on the origins of crude oil imports in our Weekly Highlights, which are included in our weekly data release, as well as in This Week In Petroleum.

But some analysts have “over-interpreted” this data in our opinion. One problem associated with weekly import data in general, is that the timing of a shipment can significantly impact the data from one week to another. A large tanker arriving just before the week ends will inflate that week’s volume, while reducing the following week’s volume. This is the nature of weekly import data. But that general problem aside, as an example of some analysts “over-interpreting” the country-level import volume data, we have recently stated how crude oil imports from Venezuela have been “close to” normal levels, or as described in the week’s Weekly Highlights, as “averaging a little below pre-strike levels.” Some analysts have then made two leaps of logic that are not necessarily supported. First, many have assumed that our statements about U.S. crude oil imports from Venezuela mean that total Venezuelan exports are “close to normal.” Then they make the second leap by stating that this means that Venezuelan crude oil production is “close to normal.” However, the amount Venezuela is exporting to the United States does not necessarily imply that exports to other countries would be similarly affected. In addition, other factors besides exports should be analyzed to estimate Venezuelan production. In fact, EIA’s most current estimate of Venezuelan crude oil production is 2.5 million barrels per day, significantly less than the pre-strike level of 2.9 million barrels per day as estimated in EIA’s Energy Situation Analysis Report . Qualitative statements about the level of U.S. crude oil imports are just one piece of the puzzle in determining production levels from particular countries, even after assuming normal shipping times between the countries and the United States, and great care should be taken to not “over-interpret” this data.

Rebuilding Heating Fuel Inventories
Following one of the most severe winters in recent years, the nation’s inventory of heating fuels, including heating oil (high-sulfur distillate fuel) and propane, plunged to near historical low levels at the end of March 2003. Preliminary March data show heating oil inventories ended the 2002-03 heating season at an estimated 36.6 million barrels, a near-record low for March, while at the same time inventories of propane fell to an estimated 19.5 million barrels, the lowest March level in over 30 years. Although heating fuel markets appeared to have weathered last winter without any major supply disruptions, the same may not be said for next winter if heating fuel inventories fail to rebuild to adequate levels before the onslaught of cold weather. The average summer stockbuild for heating oil inventories over the most recent 5-year period totaled nearly 15 million barrels, with inventories at the start of the heating season (beginning of October) ranging from a low of 47.1 million barrels in 2000, to a high of nearly 80 million barrels in 1998. Assuming the same 15 million average stockbuild occurs this year, heating oil inventories would be expected to reach slightly above 51 million barrels prior to the start of the 2003-04 heating season. At that level, U.S. heating oil inventories would begin next winter at the second lowest level since 1996, and would be more than 7 million barrels lower than last year when inventories were barely above the low end of the normal range. But other factors may hinder even an average stockbuild this year, including the recent strife in Venezuela that nearly shut down that country’s oil industry, including its refineries. Since most imports of distillate fuel come from Canada, the Virgin Islands, and Venezuela, a resumption of imports of distillate fuel from Venezuela, in particular, becomes crucial as the country struggles to regain pre-strike export levels.

U.S inventories of propane began last winter’s heating season at nearly 71 million barrels, the highest pre-heating season level since 1998. But frigid weather during January and February contributed to quickly reduce the nation’s stockpile of propane to a record low 18.2 million barrels by week ending March 14, 2003. By month’s end, U.S. inventories had climbed slightly higher to finish the 2002-03 heating season at an estimated 19.5 million barrels, the lowest level for this month since 1970. Despite strong demand due to cold weather last winter, U.S. inventories of propane helped moderate the effects of the severe winter that otherwise would have been more debilitating on propane markets. But the prospect of rebuilding propane inventories to prior year levels appears to be in jeopardy. The typical off-season stockbuild, based on the most recent 5-year period, averaged slightly more than 36 million barrels. Consequently, the pre-heating season level of propane inventories would total about 56 million barrels, a level somewhat short of the 60-million-barrel level believed by industry observers as adequate prior to the start of the heating season. Further complicating the approaching summer stockbuild is the propane inventory situation in Canada that is thought to be even more precarious than in the U.S. As recently as February 2003, Canadian inventories of propane fell below 1 million barrels, according to the National Energy Board of Canada. Because Canada is the largest exporter of propane to the U.S., any supply shortfalls would need to be rectified ahead of any U.S. supply requirements, potentially hindering a previously secure supply source. While it is too early to be to specific, the overall expectation is that heating fuel inventories will more than likely begin the next heating season much lower than last year, which could present a great risk to heating fuel markets if the U.S. experiences a repeat of last winter’s weather without the benefit of an inventory cushion.

U.S. Retail Gasoline Price Falls for the Fourth Week in a Row
The U.S. average retail price for regular gasoline fell last week for the fourth week in a row. Prices dropped by 3.5 cents per gallon as of April 14 to hit 159.5 cents per gallon, which is still 19.1 cents per gallon higher than a year ago. Over the last four weeks, the average price for regular gasoline has declined by 13.3 cents per gallon. The decline reflects, in part, the reduction in crude oil prices recently. Prices were down throughout the nation last week, with the largest decrease occurring in the Midwest, where prices fell 4.1 cents per gallon. Retail prices in California remained above $2 per gallon for the seventh week in a row, decreasing to 207.7 cents per gallon. Average prices for the West Coast fell below $2 per gallon for the first time in 5 weeks, averaging 196.7 cents per gallon on April 14.

Retail diesel fuel prices decreased for the fifth consecutive week, falling 1.5 cents per gallon to a national average of 153.9 cents per gallon as of April 14. Diesel fuel prices are down in conjunction with recent drops in crude oil prices and in anticipation of looser market conditions. Retail diesel prices were down throughout the nation, with the largest price decrease occurring in New England, where prices fell 5.5 cents per gallon. Prices in the Central Atlantic were the highest in the nation, averaging 170.4 cents per gallon, while prices in the Gulf Coast were the lowest, averaging 145.5 cents per gallon.

Propane Posts Modest Weekly Build
U.S. inventories of propane posted a relatively modest 0.6-million-barrel build during the week ending April 11 that pushed up inventories to an estimated 21.7 million barrels. The unexpected small rise continued to keep U.S. inventories of propane below the average range for this period. Seasonal stock gains were reported in the East Coast and Midwest regions last week with respective increases totaling 0.2 million barrels and 0.7 million barrels, but the gains were partially offset by the nearly 0.4-million-barrel drop in Gulf Coast inventories during this same period. While the weekly stock gain in the East Coast moved inventories closer to the middle of the average range for this time of year in that region, the Midwest gain in inventories continued to fall short of moving the region’s stocks to above the lower limits of the average range. The drop in Gulf Coast inventories moved the region’s level of stocks further below the average range last week. Inventories of propylene for non-fuel use fell to less than 1.7 million barrels from nearly 2.0 million barrels from the prior week, causing a corresponding drop in the proportion to total propane/propylene inventories to 7.8 percent from last week’s 9.3 percent.

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