EIA report: increased inventory would have to come from imports
WASHINGTON -- The Energy Information Administration March 26 was guarded in its optimism over the fact that imports from Venezuela last week seem to have returned to normal levels for the first time since Dec. 6, 2002.
At the same time, "the price of West Texas Intermediate crude has recently dropped below $30 per barrel for the first time since mid-December," the report added.
But do these statistics "signal a return to a more stable oil market? Well, not so fast," EIA's March 26 report stated.
"Total commercial petroleum inventories are currently nearly 91 million barrels below the middle of the normal range.
"To get both crude oil and petroleum product inventories to increase, more crude oil needs to be imported in order to build up crude oil stocks and increase inputs into refineries," the report stated.
EIA estimates that it would take more than three months for this to happen and that imports would have to average 10.4 million barrels each day in the second quarter. "And if supplies arrive at a pace averaging nearly 10 million barrels per day, which may even be optimistic," the report stated, "inventories would not return to the middle of the range [of supply] until sometime in September."
The report noted that retail diesel prices were down for the second consecutive week as of March 24, with Midwest prices falling the most -- 11.2 cents per barrel -- to 159.6 cents a gallon. New England prices remained the highest in the nation, according to the report, although they had decreased 9.9 cents to 189.2 cents per gallon.
EIA information explained that while "global [petroleum] product demand" historically falls from April through June because of warmer weather, crude oil demand doesn't, and that in the U.S. both crude and petroleum product demand increase in the second quarter. So, inventory levels are more likely to increase by more imports than by decreased demand, it concluded.
As to where those imports would come from, the report didn't speculate. And it did not mention any effect of the war with Iraq on inventories.
-- The Trucker staff March 28, 2003