Posted: Fri Apr 11, 2008 7:16 pm Post subject: U.S. to start summer with gasoline surplus
seems like a pretty massive surplus to me .. anyone wanna explain this ?
Quote:
The two main factors protecting gasoline inventories from a sharp decline before driving season, experts said, are soft consumption and robust import levels.
The EIA expects this year's summer gasoline demand in the United States -- a country known for its resilient love for road travel -- to shrink for the first time since 1991 under the weight of an economic slowdown.
"We agree with the government that summer gasoline demand will shrink this year, which will be a key factor keeping stockpile levels relatively high," said Eric Wittenauer, analyst at Wachovia Securities in New York.
Meanwhile, imports from Europe are likely to continue to push into the U.S. market. Europe increasingly favors diesel as a motor fuel, leaving it with an oversupply of gasoline from its refineries that typically sails west across the Atlantic.
"There's an overall European surplus of gasoline," said ESAI's Cohan. "Certainly European imports will provide some of the balance."
The expected robust stockpile levels at the start of the summer driving season, which runs from Memorial Day weekend in May to Labor Day weekend in early September, will come despite below-normal output levels from domestic refiners.
"We're anticipating that refiners will wait as long as possible to start producing more gasoline," said Cohan. "Until they can get a more favorable crude price or until they absolutely have to because of low stockpiles, they won't."
Posted: Fri Apr 11, 2008 8:14 pm Post subject: Re: U.S. to start summer with gasoline surplus
Bernanke has claimed energy inflation is almost over since 2006. He's still doing it as the other government office keeps predicting future gas records. _________________ People first, then things, then dollars.
There will be enslavement, cannibalism, & zombie invasions.
Posted: Fri Apr 11, 2008 9:30 pm Post subject: Re: U.S. to start summer with gasoline surplus
As the table indicates, the increase in inventory occurred since the first week in December. There has been some drain the last couple of weeks.
But, what it does not indicate is that a lot of the buildup consisted of blending components, which have to be blended with some other ingredient to be burnable. This stuff all came into the country via imports.
For the last two weeks, the amount of blending components has been over 50% of the total inventory for the first time. In other words, less than half of the inventory above is useable in its current form. A year ago, this number was 45%.
There was some thinking a couple of months ago that the real shortage would be of the other ingredients needed to turn this blending stock into real gasoline. Ethanol can be used for this purpose in some cases, and there is no apparent shortage of that.
There are some others, which may be in short supply going into summer.
As for Europe, they may have a surplus of gasoline, but their diesel situation is terrible, as DP has pointed out repeatedly.
Ironically, no one ,including the EIA, knows exactly the detail on what the blending components are, or on the inventory of the other ingredients needed for blending.
As for demand, for the past couple of months, there has been a slight decrease in demand over last year, possibly about .5%, but last week's data suggested an increase of about that much, so no telling what the actual data will be when all is said and done.
But the article is right on in thinking that the refiners will just stay at low levels of operation until the inventory gets down to some normal level, and/or the prices improve. We have been following this for quite awhile, as the frequent PO.com viewers well know.
The last four weeks, the average inventory decrease was 3.6 million barrels per week. At that rate of decline, we will be down to 200 million barrels in 6 weeks, if the refiners do not turn the units back on.
So check back with us in about a month, and we will see what happened. Prediction: you will be paying much more for gas.
Posted: Fri Apr 11, 2008 9:34 pm Post subject: Re: U.S. to start summer with gasoline surplus
pup55 wrote:
So check back with us in about a month, and we will see what happened. Prediction: you will be paying much more for gas.
We better, I have a couple of bets to win.
<- already paying 4.05 a gallon since I was so "smart" and bought a 50 mpg diesel. Its not that bad _________________ "Mit der Dummheit kaempfen Goetter selbst vergebens" -Friedrich von Schiller
Posted: Sat Apr 12, 2008 9:59 am Post subject: Re: U.S. to start summer with gasoline surplus
Quote:
As for Europe, they may have a surplus of gasoline, but their diesel situation is terrible, as DP has pointed out repeatedly.
this is a strange situation, diesel should be easier to refine than petrol due to the fact it contains longer carbon chains. Less cracking required. _________________
Posted: Sat Apr 12, 2008 10:56 am Post subject: Re: U.S. to start summer with gasoline surplus
dukey wrote:
this is a strange situation, diesel should be easier to refine than petrol due to the fact it contains longer carbon chains. Less cracking required.
You can only fudge your output so much. No matter how much you only want diesel you're stuck with a percentage of gasoline. Since no one in europe wants it, they send it over here.
Joined: Oct 23, 2004 Posts: 5899 Location: New Jersey
Posted: Sat Apr 12, 2008 12:00 pm Post subject: Re: U.S. to start summer with gasoline surplus
To the best of my knowledge, there is still a shortage of a key 'summer' blending component - aklyalte. So the high inventory of unfinished gasoline dosen't mean much unless it can be shown that it can be converted into finished gasoline.
So far in 2008, finished gasoline inventories are up an inconsequential 1.4 million barrels over last year's rather low levels.
Quote:
Gas, Diesel Prices Hit New Records
By JOHN WILEN – 1 day ago
This year, the spring price spike is being exacerbated by two unusual factors: tight supplies of key gasoline blending components and record oil prices. Analysts say alkylate, an ingredient critical to the manufacture of summer grade gasoline, is in short supply and will push prices higher.
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