Released on November 5, 2003
(Next Release on November 13, 2003)

Sources
Information is a key commodity in the Federal Government, as well as in other large organizations. This is true of oil markets as well. Lately, one of the key information issues for some analysts has been the source and composition of U.S. crude oil imports.

EIA collects weekly data on crude oil imports from 20 different countries in Part C of our Form EIA-804. However, some companies find it difficult to relay information about the source of their weekly crude oil imports in a timely enough fashion to report precisely on this form. And most importantly, the sample used for this form is designed to get a statistical representation of total imports, not to get a representative sample for each of the twenty countries individually. As such, EIA does not feel these data are accurate enough to publish country-level amounts in either the Weekly Petroleum Status Report or This Week In Petroleum. However, based on historical experience, it is clear that information from the EIA-804 can be used to talk in general terms about trends in our imports from some major supplying countries. In its text highlights that EIA releases along with the data at 10:30 a.m. each Wednesday morning (Thursdays when a holiday occurs earlier in the week), EIA often notes such trends. With monthly data only available through August, but weekly data available for September and October, it’s interesting to look at how crude oil imports from some countries have tracked over the last couple of months.

Saudi Arabia
The United States imported nearly 1.5 million barrels per day of crude oil from Saudi Arabia in August, according to the monthly data, roughly comparable to levels typically seen prior to Venezuelan and non-related disruptions earlier this year. The weekly data suggests that imports may have increased in September, then fallen in October. This country has been of particular interest since OPEC has decided to cut production beginning November 1 and Saudi Arabia would likely account for a large share of any production cuts by OPEC. Of course, with shipping times from the Persian Gulf to the United States averaging around six weeks, imports received this past week likely represent crude oil produced back in early September.

Venezuela
A lot of interest has focused on U.S. crude oil imports from Venezuela. Following the December 2002 strike by petroleum workers in Venezuela, there has been a lot of speculation regarding the amount of Venezuela’s crude oil production. Some analysts have been interested in using the level of U.S. crude oil imports from Venezuela as a proxy for their production levels, since the United States is their leading customer. U.S. crude oil imports from Venezuela rose in August to reach more than 1.4 million barrels per day. It appears that imports dropped some in September before rising again in October.

Nigeria
With some turmoil in the Nigerian oil industry this year, this country has also been the focus of interest with regards to U.S. crude oil imports from there. In the last six months’ worth of monthly data (March 2003 through August 2003), U.S. crude oil imports from Nigeria have ranged between 0.8 and 1.0 million barrels per day in five of the six months. It appears, according to the weekly data, that September and October will not stray from this pattern.

Mild October Weather Buoys Heating Fuels Outlook
The outlook for winter heating fuels, including inventories of distillate fuel oil (used as both heating oil and diesel fuel) and propane, was buoyed somewhat as a result of relatively mild weather over much of the nation during October. While temperatures averaged nearly 11 percent above normal over the nation last month, regional temperatures were considerably more diverse. The Northeast and Mid-Atlantic regions, where a large portion of the nation's heating oil is consumed, reported temperatures slightly colder than normal, while the Midwest region, where a large portion of the nation's propane is consumed, reported warmer-than-normal temperatures. While it's true that October is considered a swing month where inventories can show monthly gains as well as losses, October's relatively mild weather helped boost inventories for both of these fuels slightly, possibly lessening industry concerns over the adequacy of heating fuel supplies during the early stages of winter. Last month, total inventories for distillate fuel oil and propane stood at levels well within their respective average ranges for that time of year. However, the concern at that time was not so much about the total level of heating fuels inventories, but rather the location and type of heating fuels available (see the October 8 edition of This Week In Petroleum.)

While total distillate fuel inventories gained 1.3 million barrels during October, the heating oil component, or high-sulfur distillate fuel oil, rose by 2.5 million barrels during this same period. More importantly, in the East Coast region, high-sulfur distillate fuel oil, gained 0.1 million barrels, a level that boosted its position from about 18 percent below the 5-year average at the beginning of the month to a level just 9.9 percent below the 5-year average as of October 31, 2003. October's balmy weather also improved the outlook for propane, particularly in the East Coast and Midwest regions, where inventories were tracking well below their respective average ranges at the beginning of October. During the month, U.S. inventories of propane moved from a level that was 3.6 percent below the 5-year average to a level that stood 1.8 percent above the 5-year average as of October 31, 2003. During this same time, inventories in the East Coast improved from nearly 25 percent below the 5-year average to slightly more than 12 percent below the 5-year average. Moreover, Midwest inventories went from a position that was about 18 percent below the 5-year average to 9.8 percent below the 5-year average as of October 31. Consequently, inventories in the Midwest region moved within the lower boundary of its average range during October. Nevertheless, while the heating fuels inventory situation improved during the month, prudent observers would be correct in maintaining some level of caution when assessing the overall adequacy of heating fuels for the remainder of the heating season.

U.S. Retail Gasoline Prices Fall Again
The U.S. average retail price for regular gasoline fell last week by 0.7 cent per gallon as of November 3 to reach 153.5 cents per gallon, which is 8.7 cents per gallon higher than a year ago. This is the ninth time in ten weeks that the national average retail price has fallen. Gasoline demand remains strong for this time of year, and it’s possible that if gasoline stocks dwindle, prices could retain some strength. Retail regular gasoline prices were down throughout most of the country last week, with the West Coast seeing a decrease of 2.0 cents per gallon to hit 168.2 cents per gallon. California prices averaged 171.1 cents per gallon after falling 2.6 cents this past week. The Midwest was the only region to see a price increase, rising 0.8 cent to hit 152.0 cents per gallon.

Retail diesel fuel prices fell for the second week in a row, decreasing by 1.4 cents per gallon as of November 3 to a national average of 148.1 cents per gallon, which is 3.9 cents per gallon higher than a year ago. Retail diesel prices were mixed last week, with the Midwest seeing the largest price decrease of 2.0 cents to reach 147.8 cents per gallon. The West Coast and Rocky Mountains each saw a small price increase, 0.3 cent and 0.7 cent, respectively.

Residential Heating Oil Prices Drop Slightly While Propane Prices Level Out
Residential heating oil prices decreased slightly during the period ending November 3, 2003. The average residential heating oil price was 138.2 cents per gallon, a reduction of 0.4 cent from last week and 10.5 cents higher than this time last year. Wholesale heating oil prices stood at 85.4 cents per gallon, a decrease of 2.9 cents from the previous week and an increase of 3.0 cents from last year.

The average residential propane price remained the same this week as last week at 132.5 cents per gallon. This was an increase of 17.4 cents over propane prices for this same time last year. Wholesale propane prices decreased 4.3 cents per gallon, from 68.2 to 63.9 cents per gallon. This was an increase of 8.7 cents from the November 4, 2002 price of 55.2 cents per gallon.

Propane Posts Large Weekly Build
U.S. inventories of propane reported a large weekly stockbuild that totaled nearly 1.4 million barrels, raising primary inventories to an estimated 66.8 million barrels as of October 31, 2003. Moreover, last week's stockbuild contributed to October's above average 2.4-million-barrel build that marked the fifth consecutive month of above average stockbuilds since the start of the build season which typically lasts from April through September. In contrast, October inventories over the most recent 5-year period showed a net loss averaging 0.3 million barrels. But even more surprising was that U.S. inventories as of the end of October 2003 are now 1.7 million barrels above year-ago levels, whereas only one month ago, as of September 30, 2003, propane inventories were 6.1 million barrels below year-ago levels. Regionally, Gulf Coast inventories posted the highest weekly increase with more than 1.0 million barrels, followed with a 0.6-million-barrel gain in the Midwest. East Coast inventories reversed direction last week after posting four consecutive weekly gains with a nearly 0.3-million-barrel loss. Propylene non-fuel use inventories pushed higher by 0.4 million barrels to 2.1 million barrels last week, a level that accounts for a higher 3.2 percent of total propane/propylene inventories over the prior week’s 2.6 percent share.

Note: Text from the previous editions of "This Week In Petroleum" is now accessible through a link at the top right-hand corner of this page.