This Week in Petroleum 6-13-07


Very brief update. First, I just came back from the hospital, where they extracted a small boulder from my kidney. With that, I put this horrible episode behind me.

On the inventory report, I don’t think this bodes well. I had seen some predictions just before the report was released that the gasoline build was expected to be 4 million barrels. The reported build was zero, which is consistent with what I wrote last week about inventory builds slowing in June before falling in July and August. But refinery utilization and imports both fell a bit. If those trends don’t reverse, the recent price drop will change direction in short order.

And now, I really am on hiatus.


As I indicated earlier, I am about to take a break from writing. Therefore, this will be my final TWIP for a while. Furthermore, I have just gotten news that I am to report to the hospital on Wednesday for final resolution of my kidney stone. It was a great relief to hear that I will get this taken care of prior to my flight back home. But, it will mean that I will be unable to update this after the report is released on Wednesday.

I think this week’s TWIP will provide a good indication of how the summer may go. As I pointed out last week, gasoline inventory builds typically slow in June and then start to fall in July and August. However, the high gasoline prices in the U.S. are predictably attracting strong imports (and driving up gasoline prices all over the globe).

I haven’t yet seen any predictions for this week’s report, but last week’s report was confusing. Gasoline inventories swelled by far more than expected, on the back of strong imports. But refinery utilization was down sharply. That is not a good sign. However, I would predict, on the basis of the recent strong import numbers, that we are likely to break the historical trend and continue to build gasoline inventories for the foreseeable future. If the trend continues, then we have probably seen the highs for gasoline prices this year. If inventories turn back down, or a hurricane enters the Gulf of Mexico, then we almost certainly have not.

I will try to update the numbers following the release, but again it probably won’t be until Thursday.

3 thoughts on “This Week in Petroleum 6-13-07”

  1. OK, So we are looking at $4/gal this summer? That is going to get ugly, especially in Detroit.

    Luckily, we will have plenty of comic relief out of Washington DC, as our elected (and insulated) officials take up the cause of us common people against the evils of Big Oil…

  2. I checked TWIP for 6-20-07. Gasoline inventories continue to build, albeit at a slower rate. Weekly inventories are up 1.8 million barrels. In terms of days in inventory, we are only 1 day below last year, although absolute inventories are about 10 million barrels less than the same week in 2006. Imports peaked last week at 1.5 million barrels per day.

    As one would expect, retail prices are down in all markets. At this rate, we should be back to normal inventory levels by the end of July. With the Independence day holiday in the middle of the week (Wednesday) we may not see a spike in consumption that might follow a 3 or 4-day weekend.

    I still have yet to pay more than $3 for a gallon of gas in any of my vehicles. But I am planning to drive up to see the inlaws in early July, with PADD II hovering around $3 I could be in trouble.

Comments are closed.