Petroleum and Natural Gas Situation

Transcription

1 Petroleum and Natural Gas Situation John C. Felmy Chief Economist and Director Statistics Department American Petroleum Institute

2 EIA Forecast of Winter Fuel Costs October 2

3 EIA History and Forecast of Winter Fuel Costs Winter Heating Bills - EIA - October $1,600 $1, $1, Per Heating Season $1,000 $800 $ Natural Gas Heating Oil Propane $400 $200 $

4 NOAA Winter Outlook 4

5 Déjà vu, All Over Again Early Cold winter Venezuela shutdown Nigerian strikes Iraq High crude oil prices California MTBE ban transition start Summer Blackout Pipeline problems Strong demand Japanese nuclear outages OPEC cuts Cold winter Japanese nuclear outages Venezuela uncertainty Iraq uncertainty Nigerian uncertainty Terrorist attacks Norwegian Strikes Yukos Strong economic growth Dollar depreciation High crude oil prices High natural gas prices Lower sulfur gasoline California finishes MTBE ban transition Mississippi river accident Refinery outages Strong gasoline demand NY/CT MTBE bans Hurricanes 5

6 31-Dec Crude oil futures prices - NYMEX Crude Oil Prices,, NYMEX $ $ $ Oct 5-Nov 19-Nov 3-Dec 17-Dec 8-Oct Jan 15-Jan 29-Jan 12-Feb 26-Feb 12-Mar 26-Mar 9-Apr 23-Apr 7-May 21-May 4-Jun 18-Jun 2-Jul 16-Jul 30-Jul 13-Aug 27-Aug 10-Sep 24-Sep Crude Oil - NYMEX - quotes.ino.com $ per gallon

7 17-Dec 31-Dec Futures price gasoline - NYMEX NYMEX Gasoline Prices, and Dec 22-Oct 5-Nov 19-Nov Jan 15-Jan 29-Jan 12-Feb 26-Feb 12-Mar 26-Mar 9-Apr 23-Apr 7-May 21-May 4-Jun 18-Jun 2-Jul 16-Jul 30-Jul 13-Aug 27-Aug 10-Sep 24-Sep 8-Oct $ per gallon

8 17-Dec 31-Dec Gasoline - Retail Regular Gasoline Prices versus 2002 Source: AAA Dec 22-Oct 5-Nov 19-Nov Jan 15-Jan 29-Jan 12-Feb 26-Feb 12-Mar 26-Mar 9-Apr 23-Apr 7-May 21-May 4-Jun 18-Jun 2-Jul 16-Jul 30-Jul 13-Aug 27-Aug 10-Sep 24-Sep 8-Oct Source: Retail Gasoline - AAA - $ per gallon

9 The crude oil and gasoline roller coaster Gasoline Prices $2.000 Retail Regular - AAA 5/26/04 $ /11/04 $ /17/03 $ /29/03 $1.737 Dollars per Gallon $1.500 $1.000 $0.500 $ /1/2002 6/2/03 $ /13/02 $ /12/03 $ ($37.83 per bbl) 4/29/03 $ ($25.24 per bbl) NYMEX WTI 12/1/2002 1/1/ 2/1/ 3/1/ 4/1/ 5/1/ 6/1/ 7/1/ 8/1/ 9/1/ 10/11/04 $ ($53.64 per bbl) 81 8/26/04 $ ($48.70 per bbl) 12/16/03 $ /1/04 $ ($42.33 per bbl) 3/17/04 $ ($38.18 per bbl) 9/22/03 $ ($26.96 per bbl) 10/1/ 11/1/ 12/1/ 6/29/04 $ ($35.66 per bbl) Source: Retail Gasoline - AAA - Crude Oil - NYMEX - quotes.ino.com 1/1/ 2/1/ 3/1/ 4/1/ 5/1/ 6/1/ 7/1/ 8/1/ 9/1/ 10/1/ 9

10 Crude oil and gasoline prices from lows to highs $2.50 May 24, $2.06 $2.00 Jun 19, 2000 May 28, 2001 $1.68 $1.70 Mar 14, $1.73 Aug 25, $1.75 Price per Gallon $1.50 $1.00 Feb 22, 1999 $0.91 Mar 6, 2000 $34.13/Barrel Sep 18, 2000 $37.20/Barrel Dec 17, 2001 $1.06 Jun 2, $1.47 Mar 14, $37.83/Barrel Dec 15, $1.47 $1.239 Oct 6, $0.50 $0.00 Feb 22, 1999 $11.76/Barrel Nov 19, 2001 $17.45/Barrel May 5, $25.24/Barrel Jan-99 Apr-99 Jul-99 Oct-99 Jan-00 Apr-00 Jul-00 Oct-00 Jan-01 Apr-01 Jul-01 Oct-01 Jan-02 Apr-02 Jul-02 Oct-02 Jan-03 Apr-03 Jul-03 Oct-03 Jan-04 Apr-04 Jul-04 Oct-04 Crude Oil (NYMEX) Regular Gasoline (EIA) 10

11 Diesel and crude oil prices Diesel and Crude Oil Prices 10/11/04 $2.115 $2.00 3/14/03 $ /17/02 $ /28/03 $ /26/04 $1.831 $1.50 7/6/04 $ /11/04 $ ($53.64 per bbl) 3/12/03 $ ($37.83 per bbl) 7/ 7/ 03 $ / 13/ 02 $ ($25.19 per bbl) 8/26/04 $ ($48.70 per bbl) 6/1/04 $ ($42.33 per bbl) $1.00 $0.50 6/29/04 $ ($35.66 per bbl) 4/29/03 $ ($25.24 per bbl) 9/22/03 $ ($26.96 per bbl) $0.00 Source: Retail Gasoline - AAA - Crude Oil - NYMEX - quotes.ino.com 11

12 Year to date the refineries have produced record amounts of gasoline Gasoline production Average Thousand barrels per day 1/2 1/16 1/30 2/13 2/27 3/12 3/26 4/9 4/23 5/7 5/21 6/4 6/18 7/2 7/16 7/30 8/13 8/27 9/10 9/24 10/8 10/22 11/5 11/19 12/3 12/17

13 Gasoline imports have increased significantly and are now at record levels Total Gasoline Imports Average Thousand barrels per day 1/2 1/16 1/30 2/13 2/27 3/12 3/26 4/9 4/23 5/7 5/21 6/4 6/18 7/2 7/16 7/30 8/13 8/27 9/10 9/24 10/8 10/22 11/5 11/19 12/3 12/17

14 Gasoline inventories Inventories listed in millions of barrels. Week Ending October 1 Week Ending September 24 Total Gasoline Inventories Change from September 24 to October 1 Year Ago* () Change from to Average** Change from Average National % % % East Coast % % % New England % % % Mid-Atlantic % % % South Atlantic % % % Midwest % % % Gulf Coast % % % Mountain % % % West Coast % % % 14

15 Natural gas prices have been above year ago levels Natural Gas Prices,, NYMEX $ per mmbtu 1-Jan 15-Jan 29-Jan 12-Feb 26-Feb 12-Mar 26-Mar 9-Apr 23-Apr 7-May 21-May 4-Jun 18-Jun 2-Jul 16-Jul 30-Jul 13-Aug 27-Aug 10-Sep 24-Sep 8-Oct 22-Oct 5-Nov 19-Nov 3-Dec 17-Dec 31-Dec

16 Natural gas in storage record level for time of year Natural Gas Storage min max Average Dec 2-Jan 16-Jan 30-Jan 13-Feb 27-Feb 12-Mar 26-Mar 9-Apr 23-Apr 7-May 21-May 4-Jun 18-Jun 2-Jul 16-Jul 30-Jul 13-Aug 27-Aug 10-Sep 24-Sep 8-Oct 22-Oct 5-Nov 19-Nov 3-Dec BCF 3/14/ /11/03 642

17 1,200 1, Rigs drilling for natural gas have increased to record levels US Natural Gas Rig Counts - Baker Hughes 17 5/4/ 1/4/1999 3/4/1999 5/4/1999 7/4/1999 9/4/ /4/1999 1/4/2000 3/4/2000 5/4/2000 7/4/2000 9/4/ /4/2000 1/4/2001 3/4/2001 5/4/2001 7/4/2001 9/4/ /4/2001 1/4/2002 3/4/2002 5/4/2002 7/4/2002 9/4/ /4/2002 1/4/ 3/4/ 5/4/ 7/4/ 9/4/ 11/4/ 1/4/ 3/4/ 7/4/ 9/4/ 7/9/01 = /8/04 = /17/02 = /1/02 = 673 3/29/02 = 591 4/19/99 = 362

18 EIA natural gas production and demand forecast Natural Gas Forecast EIA - October Production Demand Percent Change

19 Propane in storage Propane Stocks Min Max Average Thousand Barrels 2-Jan 16-Jan 30-Jan 13-Feb 27-Feb 12-Mar 26-Mar 9-Apr 23-Apr 7-May 21-May 4-Jun 18-Jun 2-Jul 16-Jul 30-Jul 13-Aug 27-Aug 10-Sep 24-Sep 8-Oct 22-Oct 5-Nov 19-Nov 3-Dec 17-Dec

20 NYMEX propane futures prices are at or near record levels Propane Prices,, NYMEX $ per mmbtu 1-Jan 15-Jan 29-Jan 12-Feb 26-Feb 12-Mar 26-Mar 9-Apr 23-Apr 7-May 21-May 4-Jun 18-Jun 2-Jul 16-Jul 30-Jul 13-Aug 27-Aug 10-Sep 24-Sep 8-Oct 22-Oct 5-Nov 19-Nov 3-Dec 17-Dec 31-Dec

21 Residual fuel in storage is below average Residual Fuel Stocks Max Average Min Million Barrels 2-Jan 16-Jan 30-Jan 13-Feb 27-Feb 12-Mar 26-Mar 9-Apr 23-Apr 7-May 21-May 4-Jun 18-Jun 2-Jul 16-Jul 30-Jul 13-Aug 27-Aug 10-Sep 24-Sep 8-Oct 22-Oct 5-Nov 19-Nov 3-Dec 17-Dec

22 17-Dec 31-Dec NYMEX heating oil prices are at record levels NYMEX Heating Oil Prices, and Dec Jan 15-Jan 29-Jan 12-Feb 26-Feb 12-Mar 26-Mar 9-Apr 23-Apr 7-May 21-May 4-Jun 18-Jun 2-Jul 16-Jul 30-Jul 13-Aug 27-Aug 10-Sep 24-Sep 8-Oct 22-Oct 5-Nov 19-Nov $ per gallon

23 Distillate oil in storage is below average Total Distillate Stocks Average Max Min Million barrels 2-Jan 16-Jan 30-Jan 13-Feb 27-Feb 12-Mar 26-Mar 9-Apr 23-Apr 7-May 21-May 4-Jun 18-Jun 2-Jul 16-Jul 30-Jul 13-Aug 27-Aug 10-Sep 24-Sep 8-Oct 22-Oct 5-Nov 19-Nov 3-Dec 17-Dec

24 Distillate oil in storage is lower in the Mid-Atlantic Total Distillate Inventories (heating oil and diesel fuel) Week ended Week ended Average Year Ago % Change from % Change from Oct 1 Sep last year Average Million Barrels Million Barrels Million Barrels Million Barrels National East Coast New England Mid-Atlantic South Atlantic Midwest Gulf Coast Mountain West Coast High Sulfur Distillate Inventories (heating oil) Week ended Week ended Average Year Ago % Change from % Change from Oct 1 Sep last year Average Million Barrels Million Barrels Million Barrels Million Barrels National East Coast New England Mid-Atlantic South Atlantic Midwest Gulf Coast Mountain West Coast

25 NYMEX coal prices 25

26 Spot coal prices 26

27 Coal Stocks - EIA Coal Stocks Short Tons January February March April May June July August September October November December 27

28 OPEC Capacity - EIA Table 3a. OPEC Oil Production (Energy Information Administration\Short-Term Energy Outlook --October ) 8/1/ 9/1/ Aug-04 September-04 OPEC 10 OPEC 10 Surplus Quota Quota Production Production Capacity High Range Capacity High Range Algeria ,250 1,250 1,250 0 Indonesia 1,348 1, Iran 3,817 3,817 3,900 3,900 3,900 0 Kuwait 2,087 2,087 2,400 2,400 2,400 0 Libya 1,392 1,392 1,550 1,550 1,550 0 Nigeria 2,142 2,142 2,400 2,300 2,300 0 Qatar Saudi Arabia 8,451 8,451 9,500 9,500 10,000 10, ,000 UAE 2,269 2,269 2,500 2,500 2,500 0 Venezuela 2,992 2,992 2,500 2,500 2,500 0 OPEC 10 26,000 26,000 27,795 27,690 28,190 28, ,000 Iraq 1,800 2,300 2,300 0 Crude Oil Total 25,595 29,990 30,490 30, ,000 Other Liquids 3,904 3,904 Total OPEC Supply 33,499 33,894 28

29 EIA Crude Oil Forecast 29

30 EIA Natural Gas Forecast 30

31 Second quarter industry profits were below average Profit Margins (net income/sales) All U.S. Industry Oil & Natural Gas 8.0% 6.5% 6.4% 6.4% 7.6% 7.1% 6.0% 5.4% 5.3% 5.4% 4.0% 2.0% 0.0% Last 5 Years Q2 03 Q2 04 Sources: Second quarter financial statements of major oil and natural gas companies; and "Corporate Scoreboard," Business Week, various issues for all U.S. industries. 31

32 Industry profits in perspective Profit Margins of Major Industries ( :Q2 net income/sales) Banks Pharmaceuticals & Biotechnology Semiconductors & Equipment Software & Services Insurance Household & Personal Products Communications Equipment Telecommunication Services Real Estate Hotels, Restaurants & Leisure Health Care Food, Beverage & Tobacco Media All Industry Commercial Services & Supplies Oil & Natural Gas Air Freight & Logistics Capital Goods Utilities Consumer Durables & Apparel Materials Consumer Staples Industrials Retailing Automobiles 15.2% 14.4% 11.6% 11.6% 10.0% 9.9% 9.7% 9.4% 9.3% 9.3% 8.8% 7.6% 7.5% 7.1% 6.8% 6.8% 6.1% 6.1% 5.9% 5.8% 5.6% 3.8% 2.9% 19.4% 22.4% 0% 5% 10% 15% 20% 25% Sources: Second quarter financial statements of major oil and natural gas companies; and "Corporate Scoreboard," Business Week, August 16, for all other industries. 32

33 Industry concentration 8 Firm Concentration Source: U.S. Department of Commerce, Public Citizen Floor Coverings Glass containers Auto manufacturers Tobacco Breakfast Cereals Breweries Tires Syrup Photographic equipment Soap Cutlery, flatware Butter Gloves Cookie and crackers Animal slaughtering Refineries M en's footwear Coffee and tea Snacks Wineries M ayonnaise Poultry processing Ice cream Refineries 1997 M anufacturing average Share 33