Release date: January 3, 2020  |  Next release date: January 8, 2020

This Week in Petroleum: Best of 2019

Today's This Week in Petroleum articles were originally published throughout 2019. New feature articles of This Week in Petroleum will return on January 8, 2020. The retail price and inventory paragraphs, charts, and tables accompanying the feature article have been updated to reflect data from the latest Weekly Petroleum Status Report for the week ending December 27, 2019.

(Published: July 3, 2019) Planned shutdown of Philadelphia refinery will change gasoline and diesel supply patterns for the U.S. East Coast

On Friday, June 21, the Philadelphia Energy Solutions (PES) 335,000 barrels per day (b/d) refinery in South Philadelphia experienced a major fire and explosion. The resulting damage to the refinery and preexisting financial strains led PES to announce its intention to shut down operations at the refinery. The closure of the Philadelphia refinery would decrease the number of operating East Coast refineries to seven and total operating capacity to 889,000 b/d (Figure 1). The U.S. Energy Information Administration (EIA) estimates closing the Philadelphia refinery would reduce East Coast gasoline supplies by approximately 160,000 b/d and distillate supplies by approximately 100,000 b/d. The potential shutdown of the largest refinery by capacity on the U.S. East Coast is likely to reconfigure petroleum product supply chains in the Central Atlantic.

(Published: July 17, 2019) The crude oil adjustment accounts for differences in supply and disposition

The U.S. Energy Information Administration's (EIA) Weekly Petroleum Status Report (WPSR) provides weekly estimates of U.S. crude oil supply, including a measure of how well the supply of crude oil and the disposition of crude oil balance with each other. This measure—referred to as the adjustment—is a derived term equal to the difference between supply and disposition. If the reported supply and disposition of crude oil balanced perfectly each week, the adjustment would equal zero. For several reasons, however, this is rarely the case.

(Published: September 18, 2019) Saudi Arabia crude oil production outage will affect global oil markets and U.S. gasoline prices

On Saturday, September 14, 2019, an attack damaged the Saudi Aramco Abqaiq oil processing facility and the Khurais oil field in eastern Saudi Arabia. The Abqaiq oil processing facility is the world's largest crude oil processing and stabilization plant with a capacity of 7 million barrels per day (b/d), equivalent to about 7% of global crude oil production capacity. On Monday, September 16, 2019, the first full day of trading after the attack, Brent and West Texas Intermediate (WTI) crude oil prices experienced the largest single day price increase since August 21, 2008 and June 29, 2012, respectively.

(Published: November 6, 2019) Changing nature of non-OPEC supply types may be affecting the crude oil futures market

Changes in the oil investment and production cycle may be affecting trading dynamics for West Texas Intermediate (WTI) and Brent crude oil futures contracts. Many U.S. producers that may have traditionally hedged production years in advance may now only need to hedge using short-dated portions of the futures curve. Many domestic producers have shifted their production portfolios toward tight oil production, which has a short investment and production cycle, and could be reducing their participation in long-dated WTI futures. For example, the ratio of open interest for WTI contract months 13 and longer to current U.S. monthly production has declined since 2013. In contrast, as of October 2019, a similar ratio for Brent crude oil to production outside the Organization of the Petroleum Exporting Countries (OPEC) and the United States increased to its third-highest level, suggesting increased liquidity in long-dated Brent futures (Figure 1). Brent is the relevant crude oil benchmark used among non-OPEC, non-U.S. oil producers. Similar research from the research from the U.S. Commodity Futures Trading Commission (CFTC) published last year suggests the lower open interest among long-dated WTI futures contracts is a result of the changing investment and production cycle for U.S. oil production. In contrast, new upstream projects outside the United States are primarily deepwater projects, which have a long investment and production horizon. These qualities could be contributing to increased participation in the long-dated portion of the Brent future curve.

(Published: December 4, 2019) September was the first month the United States recorded exporting more petroleum than it imported

In September 2019, the United States exported 89,000 barrels per day (b/d) more petroleum (crude oil and petroleum products) than it imported, the first month this happened since monthly records began in 1973 (Figure 1).

U.S. average regular gasoline and diesel prices increase

The U.S. average regular gasoline retail price rose nearly 4 cents from the previous week to $2.57 per gallon on December 30, 31 cents higher than the same time last year. The Gulf Coast price rose nearly 7 cents to $2.28 per gallon, the Midwest price increased nearly 5 cents to $2.45 per gallon, and the East Coast price rose nearly 4 cents to $2.50 per gallon. The Rocky Mountain price fell nearly 3 cents to $2.66 per gallon, and the West Coast price fell nearly 1 cent to $3.22 per gallon.

The U.S. average diesel fuel price rose nearly 3 cents from the previous week to $3.07 per gallon on December 30, 2 cents higher than a year ago. The Gulf Coast price increased nearly 5 cents to $2.81 per gallon, the East Coast price rose more than 4 cents to $3.10 per gallon, the West Coast price increased nearly 3 cents to $3.62 per gallon, and the Midwest price increased 1 cent to $2.98 per gallon. The Rocky Mountain price fell more than 1 cent to $3.11 per gallon.

Propane/propylene inventories decline slightly

U.S. propane/propylene stocks decreased by 0.2 million barrels last week to 88.2 million barrels as of December 27, 2019, 8.1 million barrels (10.1%) greater than the five-year (2014-2018) average inventory levels for this same time of year. Midwest and Rocky Mountain/West Coast inventories decreased by 0.3 million barrels and 0.1 million barrels, respectively. East Coast inventories increased by 0.2 million barrels, and Gulf Coast inventories increased slightly, remaining virtually unchanged. Propylene non-fuel-use inventories represented 6.8% of total propane/propylene inventories.

Residential heating oil prices increase, propane prices decrease

As of December 30, 2019, residential heating oil prices averaged almost $3.08 per gallon, more than 2 cents per gallon above last week’s price but more than 2 cents per gallon below last year’s price at this time. Wholesale heating oil prices averaged nearly $2.16 per gallon, almost 3 cents per gallon higher than last week’s price and more than 38 cents per gallon higher than a year ago.

Residential propane prices averaged nearly $2.02 per gallon, less than 1 cent per gallon below last week’s price and almost 42 cents per gallon less than a year ago. Wholesale propane prices averaged more than $0.71 per gallon, almost 6 cents per gallon lower than last week’s price and more than 8 cents per gallon below last year’s price.

For questions about This Week in Petroleum, contact the Petroleum Markets Team at 202-586-4522.

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Retail prices (dollars per gallon)

	Retail prices	Change from last
	12/30/19	Week	Year
Gasoline	2.571	0.039	0.305
Diesel	3.069	0.028	0.021
Heating Oil	3.078	0.023	-0.023
Propane	2.018	-0.005	-0.415

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Futures prices (dollars per gallon*)

	Futures prices	Change from last
	12/27/19	Week	Year
Crude oil	61.72	1.28	16.39
Gasoline	1.747	0.041	0.421
Heating oil	2.050	0.028	0.385
*Note: Crude oil price in dollars per barrel.

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Stocks (million barrels)

	Stocks	Change from last
	12/27/19	Week	Year
Crude oil	429.9	-11.5	-11.5
Gasoline	242.5	3.2	2.5
Distillate	133.7	8.8	4.3
Propane	88.186	-0.212	17.533