In this recent EIA petroleum report, pertaining crude oil price and petroleum stocks, there is also an analysis about the recent rise in gap between the WTI and Brent oil.
I have written several posts on this issue and in this EIA review there is an in-depth analysis on the reasons from the WTI side for such an increase in gap between Brent oil and WTI spot.
The EIA review shows that this recent discount of WTI over Brent oil is something that hasn’t happened in the past for such a long period. It started during December 2010 as Brent oil had supply problems on the one hand, and an increase in demand (mainly to Asia) on the other, while Cushing didn’t rise as Brent oil did. The market usually reacts fast when there is a premium in WTI by importing oil, however when there is a discount (compare to Brent) there is more of a problem of closing the gap from logistic point of view in Cushing area: from supply side reducing the imports from Gulf Coast, and from demand side ramping up refinery runs. These logistic problems are causing the gap between Brent oil and WTI spot to maintain.
In this weekly review I will address the main news of the EIA report for the week ending on February 18th on crude oil price, petroleum stocks, production, imports and consumption.
Crude oil price for the week of February 18th
Crude oil price (WTI spot) weekly average of 84.87$/b fell by 0.87% compare to last week’s average price of 86.23$/b. On average, crude oil price (WTI) daily change was 0.43%, however its price inclined by 3.04% from beginning to end of the week.
The U.S. average retail price on gasoline made the largest rise in 2011 as it increased by 0.5 $ per gallon compare to the previous week’s average, to reach 3.19 $/g which is 0.53 $/g higher than for the same period in 2010.
Diesel prices also continue to rise, last week by over 4 cents compare to the previous week as it reached 3.57$/g – 0.74$/g higher than last year’s average price at same time.
Petroleum Stocks, production and consumption
Petroleum stocks in the US continued falling for the second straight week after rising for five weeks straight earlier; last week they have declined last week by 0.7%, a decrease of nearly 12 million barrels of crude oil to reach 1,784 million barrels.
This fall is related to the decline of Stocks of Total Gasoline by 1.2% or 2.8 million barrels– reaching 238 million barrels.
Furthermore, finished motor gasoline stocks fell by 0.7% or 0.5 million barrels, reaching 73.3 million barrels.
The average US productions (million of barrels a day) was 5.595 on a four week average, higher than last week by 1.3%, and also higher by 2.4% compare to the average production at the same time last year;
Crude oil imports has decreased for the week of February 18th (4 week average) by 3.6% compare to the week of 11/2/2011, and also declined by 0.3% compare to last year’s same time.
The crude oil refinery inputs in the US has increased by 2% for the week of February 18th (4 week average) as it reached 14.011 (million b/d) compare to the same week last year; however, it fell by 1% compare to the previous week of 11/2/2011.
The heating oil and propane prices continue to rise as the cold weather is still driving consumption of propane and heating oil up; propane stocks continue to fall dramatically; according to the latest report, they fell by 1.5 million barrels – a 4.8% decline – reaching 29.5 million barrels – the lowest level since April 2010.
For further reading (in this site):
- How does the Middle East turmoil affecting the Brent oil WTI spread
- Examining the spread between Brent oil and WTI – February 16
- How not to speculate on the WTI and Brent oil spread
- Crude oil price in 2010 and outlook for 2011
Previous posts on this subject:
- Petroleum stocks decline for first time in weeks – February 17
- Petroleum stocks on the rise – February 10
- Petroleum stocks keep on rising – February 3
- Petroleum stocks review shows a rise – January 21