Released on January 4, 2007
(Next Release on January 10, 2007)

To Revise Or Not To Revise?
While the title above pales in comparison to Shakespeare’s famous line in Hamlet, it is a question that has been on the minds of many of us in EIA as well as oil industry traders and analysts. In a note released on January 3, EIA stated that the “weekly supply data for the week ending December 15, 2006 (published on December 20) included incorrect data on PADD 2 (Midwest) crude oil stocks due to reporting errors by one or more companies.” This has led some to ask why EIA did not issue a revision of the data for the week ending December 15. To quote again from the note EIA released on this issue, “The timing of the discovery of the errors was such that revising data for December 15 would have delayed release of data for December 22 (released on December 28). Timely release to the market of correct data for December 22 was the highest priority, and we acted accordingly."

Revising weekly data is not as simple as inserting new data to replace the misreported data. Because the weekly data are a sample, there are statistical procedures used to estimate for those companies that aren’t required to report because they aren’t in the sample, and for those companies that fail to report. Changing data for one item, such as the crude oil stock level in the Midwest, also changes the crude oil stock change, the Unaccounted-for Crude Oil, as well as the four-week averages for these items. In addition, changes to these items might necessitate different statistical imputations for other items. The bottom line is that to make a revision to the weekly data, the whole system needs to be re-run from scratch, which is a time-consuming endeavor that takes resources away from working on the current data. In this particular instance, EIA made the decision that timely release of the correct data for the week ending December 22, which would have been precluded by an effort to revise the data for the week ending December 15, was the highest priority.

The chart below illustrates how Midwest crude oil stock levels would look in the month of December, had the misreported data been corrected. Essentially, the sharp drop in Midwest crude oil stocks that appeared to occur between December 15 and December 22 actually occurred between December 8 and December 15. However, by December 22, crude oil stock levels, as reported, are correct.

EIA routinely catches many reporting errors and corrects them before publication. We will endeavor to be even more vigilant in the future in trying to find these types of reporting errors. However, notwithstanding such efforts, the possibility that reporting errors may cause incorrect data to be published can never be completely eliminated. When incorrect data is published, EIA’s stated policy is to disseminate revised weekly data only if the revision is expected to substantively affect understanding of the U. S. petroleum supply. The decision to disseminate a revision to weekly data will be based on EIA’s judgment of the revision’s expected effect.

Reporting errors discovered immediately after publication can lead to revisions under EIA’s stated policy without causing a delay in release of the following week’s data. However, reporting errors discovered later in the weekly cycle, as in the recent case, require EIA to determine whether a retrospective revision requiring a delay in the next report would improve or degrade understanding of the U. S. petroleum market. EIA will continue to follow its stated revision policy to assure consistent handling of any future reporting errors that affect published data.

Residential Heating Oil Prices Continue Their Downward Trend
Residential heating oil prices decreased again during the period ending January 1, 2007. The average residential heating oil price decreased 1.9 cents per gallon last week to reach 241.5 cents per gallon, a decrease of 1.8 cents from this time last year. Wholesale heating oil prices decreased 6.4 cents to reach 168.4 cents per gallon, a decrease of 11.3 cents compared to the same period last year.

The average residential propane price increased a mere 0.1 cent, arriving at 198.5 cents per gallon. This was a decrease of 2.8 cents compared to the 201.3 cents per gallon average for this same time last year. Wholesale propane prices decreased by 2.8 cents per gallon, from 101.3 to 98.5 cents per gallon. This was a decrease of 15.4 cents from the January 2, 2006 price of 113.9 cents per gallon.

Retail Gasoline and Diesel Prices Decrease
The U.S. average retail price for regular gasoline for January 1, 2007 decreased 0.7 cent to 233.4 cents per gallon. However, prices are still 9.6 cents per gallon higher than at this time last year. East Coast prices fell 0.7 cent to 234.5 cents per gallon. In the Midwest, prices decreased 1.0 cent to 226.3 cents per gallon. Gulf Coast prices were down 1.3 cents to 220.0 cents per gallon, while Rocky Mountain prices fell 0.3 cent to 224.6 cents per gallon. The only region to see an increase was the West Coast, with prices going up 0.2 cent to 258.1 cents per gallon. Prices there have now risen for eight consecutive weeks.

Retail diesel fuel prices were also lower this week, falling 1.6 cents to 258.0 cents per gallon. Prices are 13.8 cents higher than at this time last year. All regions saw a decrease in price. East Coast prices fell 2.2 cents to 256.5 cents per gallon, while the Midwest price dropped 1.6 cents to 253.4 cents per gallon. The Gulf Coast saw a decrease of 1.4 cents to 250.0 cents per gallon. Rocky Mountain prices fell 1.6 cents to 269.7 cents per gallon, and prices on the West Coast decreased 0.3 cent to 285.3 cents per gallon.

Mild Weather Moderates December Propane Stockdraw
With December temperatures warmer-than-normal in many parts of the Nation, the stockdraw on propane during the month totaled a relatively modest 6.9 million barrels, a level well below the most recent 5-year average of about 10.4 million barrels. Moreover, during the first three months of the traditional heating season (October through December), the draw on propane inventories totaled about 9.2 million barrels, also a relatively modest level compared with the 5-year average of about 11.3 million barrels. Consequently, the mild winter experienced so far this year in most of the areas east of the Rockies has substantially diminished heating demand for propane, causing U.S. propane inventories to reach an estimated level of 61.9 million barrels as of December 29, 2006, the highest level for this time of year since 2001.

Weekly activity showed U.S. inventories of propane dropping by 1.6 million barrels. While regional inventories were mostly lower last week, the exception were inventories in the East Coast that reported a gain of 0.3 million barrels. Elsewhere, Gulf Coast inventories reported a weekly decline of 1.2 million barrels, followed by the Midwest that showed inventories down by 0.6 million barrel. Inventories in the combined Rocky Mountain/West Coast regions fell by 0.2 million barrels during this same time. Propylene non-fuel use inventories remained unchanged at 3.6 million barrels last week but accounted for a higher 5.8 percent share of total propane/propylene inventories compared with the prior week’s 5.6 percent share.

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