Mid-Continent Crude Oil Markets Continue to Adjust to Rapid Rise in Bakken Production (4/3/2013)

Released:  April 3, 2013
Next Release:  April 10, 2013

The differential between West Texas Intermediate (WTI) and North Dakota's Bakken crudes continues to fluctuate, reflecting both production growth and changes in oil transportation capacity. Bakken crude sold at a $25-per-barrel discount to WTI in early 2012 and rose to a $5-per-barrel premium last September, before again being discounted below WTI this winter. So far this year, the gap between Bakken and WTI prices has narrowed, and once again, the Bakken price has risen above the WTI price, albeit modestly (Figure 1).

West Texas Intermediate prices are determined at Cushing, Oklahoma; Bakken prices are those at Clearbrook, Minnesota, where the North Dakota pipeline network joins Enbridge's pipeline running southeast from western Canada. Because of the costs of transporting Bakken crude to Clearbrook, including the pipeline tariff, the price for Bakken at the wellhead will be less than the delivered price at Clearbrook.

The strong growth in Bakken production has frequently outpaced expansion of the local transportation infrastructure, leading to discounts for Bakken crude compared to benchmark WTI. Production in North Dakota, the primary source of Bakken crude, rose 243,000 barrels per day (bbl/d), or 58 percent, in 2012 to 663,000 bbl/d, placing North Dakota second only to Texas in oil production among all states. Meanwhile, pipeline capacity out of the region, which is also used to accommodate increased production of Canadian crude flowing through the region, was estimated at only 395,000 bbl/d in 2012.

Limited pipeline capacity has forced shippers of Bakken crude to use alternative transportation, such as railroads. According to the North Dakota Pipeline Authority, loading capacity at North Dakota rail terminals increased by 660,000 bbl/d between 2007 and the end of 2012, with an additional 355,000 bbl/d of capacity expected to come on line by the end of 2014.

Although transportation of crude oil by rail is generally more expensive than shipping by pipeline, rail-loading capacity has proven cheaper and quicker to build. In addition, the logistical flexibility of rail has enabled Bakken crude to reach refining areas not typically served by pipeline from the Bakken. Historically, crude oil production from the Northern Plains has been discounted against midcontinent crudes to account for the added costs of moving these crudes by pipeline to areas such as Cushing, Oklahoma, and the Gulf Coast (PAD District 3).

Investment in rail offloading capacity at East Coast refineries, such as Philadelphia Energy Solutions's Philadelphia complex, suggests that Bakken offers a cost-competitive alternative to Brent-linked crude imports despite the cost of transporting Bakken by rail from the Midwest. The landed cost of Nigerian crude, the leading source of East Coast imports for most of the past two decades, averaged about $117/bbl in 2012, making Bakken and other domestic crudes economical alternatives. Because of the closure of several East Coast refineries and the availability of cheaper domestic light crude, East Coast imports of Nigerian crude fell from 471,000 bbl/d in 2005 to 166,000 bbl/d in 2012.

For West Coast refineries, cost-competitive access to Bakken crude would allow the Bakken oil to displace more-expensive imports there, as well. West Coast imports, which come primarily from Saudi Arabia, Ecuador, and Iraq, have remained flat since 2006; however, Anacortes, Washington, began receiving unit-train shipments of Bakken in late 2012, potentially signaling new competition for West Coast oil imports.

As Bakken rail shipments reach the East and West coasts, pricing for Bakken crude oil is evolving. The ability to economically reach refineries on the East and West coasts expands the market for Bakken beyond the traditional Midwest and Gulf Coast refineries, which have experienced a glut of midcontinent crudes in recent years. By moving east and west, Bakken escapes the infrastructure constraints that have significantly affected the price of WTI. The Gulf Coast, where Brent-linked imports have already declined significantly, offers less opportunity for Bakken. As light-sweet imports continue to be displaced along the Gulf Coast, Bakken will increasingly compete with other domestic crudes, many of which have lower pipeline transportation costs to the Gulf Coast. As long as Bakken production and transportation capacity scramble to seek equilibrium, continued variation in the differential between Bakken and WTI prices is likely.

Gasoline and diesel fuel prices continue to decrease
The U.S. average retail price of regular gasoline decreased four cents from the previous week to $3.65 per gallon as of April 1, 2013, down 30 cents from last year at this time. The U.S. average price has declined 14 cents over the last five weeks. Prices were lower in all regions of the nation except the Rocky Mountains, where the price is $3.50 per gallon, up three cents from last week. The largest decrease came in the Midwest, where the price dropped six cents to $3.60 per gallon. The East and Gulf Coast prices are both lower by three cents, to $3.63 per gallon and $3.48 per gallon, respectively. Rounding out the regions, the West Coast price is $3.95 per gallon, a decline of two cents.

The national average diesel fuel price decreased one cent to $3.99 per gallon, 15 cents lower than last year at this time. The U.S. average price has decreased 17 cents over the last five weeks. Prices decreased in all regions of the nation except the West Coast, where the price increased two cents to $4.12 per gallon. The largest decrease came on the East Coast, where the price declined three cents to $4.03 per gallon. The Gulf Coast price is $3.92 per gallon, a drop of two cents. The Midwest and Rocky Mountain prices are both lower by a penny, to $3.97 per gallon and $3.92 per gallon, respectively.

Propane inventories decline
U.S. propane stocks fell 1.1 million barrels to end at 39.7 million barrels last week, and are 5.0 million barrels (11.3 percent) lower than the same period a year ago. Gulf Coast inventories dropped by 0.6 million barrels, and Midwest regional inventories declined by 0.4 million barrels. East Coast stocks dropped by 0.1 million barrels, while Rocky Mountain/West Coast inventories decreased slightly. Propylene non-fuel-use inventories represented 9.1 percent of total propane inventories.

Text from the previous editions of This Week In Petroleum is accessible through a link at the top right-hand corner of this page.

View the original article here

Mid-Continent Crude Oil Markets Continue to Adjust to Rapid Rise in Bakken Production (4/3/2013)

Released:  April 3, 2013
Next Release:  April 10, 2013

The differential between West Texas Intermediate (WTI) and North Dakota's Bakken crudes continues to fluctuate, reflecting both production growth and changes in oil transportation capacity. Bakken crude sold at a $25-per-barrel discount to WTI in early 2012 and rose to a $5-per-barrel premium last September, before again being discounted below WTI this winter. So far this year, the gap between Bakken and WTI prices has narrowed, and once again, the Bakken price has risen above the WTI price, albeit modestly (Figure 1).

West Texas Intermediate prices are determined at Cushing, Oklahoma; Bakken prices are those at Clearbrook, Minnesota, where the North Dakota pipeline network joins Enbridge's pipeline running southeast from western Canada. Because of the costs of transporting Bakken crude to Clearbrook, including the pipeline tariff, the price for Bakken at the wellhead will be less than the delivered price at Clearbrook.

The strong growth in Bakken production has frequently outpaced expansion of the local transportation infrastructure, leading to discounts for Bakken crude compared to benchmark WTI. Production in North Dakota, the primary source of Bakken crude, rose 243,000 barrels per day (bbl/d), or 58 percent, in 2012 to 663,000 bbl/d, placing North Dakota second only to Texas in oil production among all states. Meanwhile, pipeline capacity out of the region, which is also used to accommodate increased production of Canadian crude flowing through the region, was estimated at only 395,000 bbl/d in 2012.

Limited pipeline capacity has forced shippers of Bakken crude to use alternative transportation, such as railroads. According to the North Dakota Pipeline Authority, loading capacity at North Dakota rail terminals increased by 660,000 bbl/d between 2007 and the end of 2012, with an additional 355,000 bbl/d of capacity expected to come on line by the end of 2014.

Although transportation of crude oil by rail is generally more expensive than shipping by pipeline, rail-loading capacity has proven cheaper and quicker to build. In addition, the logistical flexibility of rail has enabled Bakken crude to reach refining areas not typically served by pipeline from the Bakken. Historically, crude oil production from the Northern Plains has been discounted against midcontinent crudes to account for the added costs of moving these crudes by pipeline to areas such as Cushing, Oklahoma, and the Gulf Coast (PAD District 3).

Investment in rail offloading capacity at East Coast refineries, such as Philadelphia Energy Solutions's Philadelphia complex, suggests that Bakken offers a cost-competitive alternative to Brent-linked crude imports despite the cost of transporting Bakken by rail from the Midwest. The landed cost of Nigerian crude, the leading source of East Coast imports for most of the past two decades, averaged about $117/bbl in 2012, making Bakken and other domestic crudes economical alternatives. Because of the closure of several East Coast refineries and the availability of cheaper domestic light crude, East Coast imports of Nigerian crude fell from 471,000 bbl/d in 2005 to 166,000 bbl/d in 2012.

For West Coast refineries, cost-competitive access to Bakken crude would allow the Bakken oil to displace more-expensive imports there, as well. West Coast imports, which come primarily from Saudi Arabia, Ecuador, and Iraq, have remained flat since 2006; however, Anacortes, Washington, began receiving unit-train shipments of Bakken in late 2012, potentially signaling new competition for West Coast oil imports.

As Bakken rail shipments reach the East and West coasts, pricing for Bakken crude oil is evolving. The ability to economically reach refineries on the East and West coasts expands the market for Bakken beyond the traditional Midwest and Gulf Coast refineries, which have experienced a glut of midcontinent crudes in recent years. By moving east and west, Bakken escapes the infrastructure constraints that have significantly affected the price of WTI. The Gulf Coast, where Brent-linked imports have already declined significantly, offers less opportunity for Bakken. As light-sweet imports continue to be displaced along the Gulf Coast, Bakken will increasingly compete with other domestic crudes, many of which have lower pipeline transportation costs to the Gulf Coast. As long as Bakken production and transportation capacity scramble to seek equilibrium, continued variation in the differential between Bakken and WTI prices is likely.

Gasoline and diesel fuel prices continue to decrease
The U.S. average retail price of regular gasoline decreased four cents from the previous week to $3.65 per gallon as of April 1, 2013, down 30 cents from last year at this time. The U.S. average price has declined 14 cents over the last five weeks. Prices were lower in all regions of the nation except the Rocky Mountains, where the price is $3.50 per gallon, up three cents from last week. The largest decrease came in the Midwest, where the price dropped six cents to $3.60 per gallon. The East and Gulf Coast prices are both lower by three cents, to $3.63 per gallon and $3.48 per gallon, respectively. Rounding out the regions, the West Coast price is $3.95 per gallon, a decline of two cents.

The national average diesel fuel price decreased one cent to $3.99 per gallon, 15 cents lower than last year at this time. The U.S. average price has decreased 17 cents over the last five weeks. Prices decreased in all regions of the nation except the West Coast, where the price increased two cents to $4.12 per gallon. The largest decrease came on the East Coast, where the price declined three cents to $4.03 per gallon. The Gulf Coast price is $3.92 per gallon, a drop of two cents. The Midwest and Rocky Mountain prices are both lower by a penny, to $3.97 per gallon and $3.92 per gallon, respectively.

Propane inventories decline
U.S. propane stocks fell 1.1 million barrels to end at 39.7 million barrels last week, and are 5.0 million barrels (11.3 percent) lower than the same period a year ago. Gulf Coast inventories dropped by 0.6 million barrels, and Midwest regional inventories declined by 0.4 million barrels. East Coast stocks dropped by 0.1 million barrels, while Rocky Mountain/West Coast inventories decreased slightly. Propylene non-fuel-use inventories represented 9.1 percent of total propane inventories.

Text from the previous editions of This Week In Petroleum is accessible through a link at the top right-hand corner of this page.

View the original article here

Mid-Continent Crude Oil Markets Continue to Adjust to Rapid Rise in Bakken Production (4/3/2013)

Released:  April 3, 2013
Next Release:  April 10, 2013

The differential between West Texas Intermediate (WTI) and North Dakota's Bakken crudes continues to fluctuate, reflecting both production growth and changes in oil transportation capacity. Bakken crude sold at a $25-per-barrel discount to WTI in early 2012 and rose to a $5-per-barrel premium last September, before again being discounted below WTI this winter. So far this year, the gap between Bakken and WTI prices has narrowed, and once again, the Bakken price has risen above the WTI price, albeit modestly (Figure 1).

West Texas Intermediate prices are determined at Cushing, Oklahoma; Bakken prices are those at Clearbrook, Minnesota, where the North Dakota pipeline network joins Enbridge's pipeline running southeast from western Canada. Because of the costs of transporting Bakken crude to Clearbrook, including the pipeline tariff, the price for Bakken at the wellhead will be less than the delivered price at Clearbrook.

The strong growth in Bakken production has frequently outpaced expansion of the local transportation infrastructure, leading to discounts for Bakken crude compared to benchmark WTI. Production in North Dakota, the primary source of Bakken crude, rose 243,000 barrels per day (bbl/d), or 58 percent, in 2012 to 663,000 bbl/d, placing North Dakota second only to Texas in oil production among all states. Meanwhile, pipeline capacity out of the region, which is also used to accommodate increased production of Canadian crude flowing through the region, was estimated at only 395,000 bbl/d in 2012.

Limited pipeline capacity has forced shippers of Bakken crude to use alternative transportation, such as railroads. According to the North Dakota Pipeline Authority, loading capacity at North Dakota rail terminals increased by 660,000 bbl/d between 2007 and the end of 2012, with an additional 355,000 bbl/d of capacity expected to come on line by the end of 2014.

Although transportation of crude oil by rail is generally more expensive than shipping by pipeline, rail-loading capacity has proven cheaper and quicker to build. In addition, the logistical flexibility of rail has enabled Bakken crude to reach refining areas not typically served by pipeline from the Bakken. Historically, crude oil production from the Northern Plains has been discounted against midcontinent crudes to account for the added costs of moving these crudes by pipeline to areas such as Cushing, Oklahoma, and the Gulf Coast (PAD District 3).

Investment in rail offloading capacity at East Coast refineries, such as Philadelphia Energy Solutions's Philadelphia complex, suggests that Bakken offers a cost-competitive alternative to Brent-linked crude imports despite the cost of transporting Bakken by rail from the Midwest. The landed cost of Nigerian crude, the leading source of East Coast imports for most of the past two decades, averaged about $117/bbl in 2012, making Bakken and other domestic crudes economical alternatives. Because of the closure of several East Coast refineries and the availability of cheaper domestic light crude, East Coast imports of Nigerian crude fell from 471,000 bbl/d in 2005 to 166,000 bbl/d in 2012.

For West Coast refineries, cost-competitive access to Bakken crude would allow the Bakken oil to displace more-expensive imports there, as well. West Coast imports, which come primarily from Saudi Arabia, Ecuador, and Iraq, have remained flat since 2006; however, Anacortes, Washington, began receiving unit-train shipments of Bakken in late 2012, potentially signaling new competition for West Coast oil imports.

As Bakken rail shipments reach the East and West coasts, pricing for Bakken crude oil is evolving. The ability to economically reach refineries on the East and West coasts expands the market for Bakken beyond the traditional Midwest and Gulf Coast refineries, which have experienced a glut of midcontinent crudes in recent years. By moving east and west, Bakken escapes the infrastructure constraints that have significantly affected the price of WTI. The Gulf Coast, where Brent-linked imports have already declined significantly, offers less opportunity for Bakken. As light-sweet imports continue to be displaced along the Gulf Coast, Bakken will increasingly compete with other domestic crudes, many of which have lower pipeline transportation costs to the Gulf Coast. As long as Bakken production and transportation capacity scramble to seek equilibrium, continued variation in the differential between Bakken and WTI prices is likely.

Gasoline and diesel fuel prices continue to decrease
The U.S. average retail price of regular gasoline decreased four cents from the previous week to $3.65 per gallon as of April 1, 2013, down 30 cents from last year at this time. The U.S. average price has declined 14 cents over the last five weeks. Prices were lower in all regions of the nation except the Rocky Mountains, where the price is $3.50 per gallon, up three cents from last week. The largest decrease came in the Midwest, where the price dropped six cents to $3.60 per gallon. The East and Gulf Coast prices are both lower by three cents, to $3.63 per gallon and $3.48 per gallon, respectively. Rounding out the regions, the West Coast price is $3.95 per gallon, a decline of two cents.

The national average diesel fuel price decreased one cent to $3.99 per gallon, 15 cents lower than last year at this time. The U.S. average price has decreased 17 cents over the last five weeks. Prices decreased in all regions of the nation except the West Coast, where the price increased two cents to $4.12 per gallon. The largest decrease came on the East Coast, where the price declined three cents to $4.03 per gallon. The Gulf Coast price is $3.92 per gallon, a drop of two cents. The Midwest and Rocky Mountain prices are both lower by a penny, to $3.97 per gallon and $3.92 per gallon, respectively.

Propane inventories decline
U.S. propane stocks fell 1.1 million barrels to end at 39.7 million barrels last week, and are 5.0 million barrels (11.3 percent) lower than the same period a year ago. Gulf Coast inventories dropped by 0.6 million barrels, and Midwest regional inventories declined by 0.4 million barrels. East Coast stocks dropped by 0.1 million barrels, while Rocky Mountain/West Coast inventories decreased slightly. Propylene non-fuel-use inventories represented 9.1 percent of total propane inventories.

Text from the previous editions of This Week In Petroleum is accessible through a link at the top right-hand corner of this page.

View the original article here

OPEC Crude Oil Production Seen Declining in 2013 (3/13/2013)

Released:  March 13, 2013
Next Release:  March 20, 2013

Total crude oil production by the members of the Organization of the Petroleum Exporting Countries (OPEC) averaged 30.3 million barrels per day (bbl/d) in fourth-quarter 2012, down from 31.1 million bbl/d in the prior quarter. In the March Short-Term Energy Outlook (STEO), EIA projects that OPEC will cut crude oil production from an average of 30.9 million bbl/d for full-year 2012 to 30.3 million bbl/d in 2013 in response to expected non-OPEC supply growth. Total OPEC petroleum liquids production will not decline as much because of growth in OPEC's condensate and natural gas liquids. When non-crude liquids are included, total projected OPEC production declines from 36.4 million bbl/d in 2012 to 36.0 million bbl/d in 2013.

With liquids production in the United States projected to rise by 835,000 bbl/d in 2013, and Saudi Arabia continuing in its traditional role as the main swing producer among the OPEC countries, it is likely that total U.S. liquids production will exceed that of Saudi Arabia this year. However, as discussed in a recent article (see EIA's This Week in Petroleum December 19, 2012), the ordering of producers depends upon accounting conventions used to make the comparison. While both U.S. and Saudi production trends are closely watched by market analysts, any future crossing of production paths is more likely to fall into the category of an interesting factoid rather than a watershed event. Regardless of how much the United States is able to reduce its reliance on imported liquid fuels, it will not be insulated from price shocks that affect the global oil market. And Saudi Arabia will likely continue in its unique role as the only holder of significant spare oil production capacity among world oil producers.

The forecast reduction in production by OPEC member countries during 2013 suggests an increase in world surplus production capacity, a widely-watched oil market indicator. EIA estimates that OPEC surplus production capacity was about 2.8 million bbl/d in February, an increase of 0.8 million bbl/d over year-ago levels, but still 0.2 million bbl/d lower than the previous three-year average. Based on EIA projections, OPEC surplus capacity will average 2.9 million bbl/d in 2013 and 3.4 million bbl/d in 2014. In all cases, Saudi Arabia is the dominant holder of surplus capacity. These estimates do not include additional capacity that may be available in Iran but that is currently offline because of the effects of U.S. and European Union sanctions on Iran's ability to sell its oil.

While the sanctions on Iran have been an ongoing story, the death of Venezuelan President Hugo Chávez and the outcome of the ensuing succession process could have implications for that country's oil sector. For now, EIA is maintaining its Venezuelan production forecast on the assumption that current policies related to the oil sector are continued. For more information, see "Political risks focus attention on supply of Venezuelan oil to the United States."

EIA has lowered its expectations for oil production in Libya to reflect persistence of the technical problems and political pressures that have already curtailed output. Libya's precarious security environment creates downside production risk from the potential for additional disruptions due to attacks, strikes, or poorly maintained infrastructure.

In Iraq, payment disputes between Baghdad and the Kurdistan Regional Government are projected to lead to loss of output in the north that, at least partly, offsets increased crude oil exports from Iraq's southern fields. EIA, like many others, has frequently revised its expectations for Iraqi production growth downward because of ongoing political difficulties.

Since 2007, Angolan production increases have been followed by subsequent declines. Technical and maintenance problems have plagued some of Angola's deepwater fields for years, particularly the Greater Plutonio project, and will continue to limit Angola's crude oil production over the STEO forecast period. Nonetheless, EIA still anticipates Angolan crude oil output to gradually increase over the next two years as new deepwater production more than offsets chronic maintenance–related declines.

Gasoline and diesel fuel prices both fall again
The U.S. average retail price of regular gasoline decreased five cents to $3.71 per gallon, down 12 cents from last year at this time. Prices declined in all regions of the nation, with the largest decrease in the Midwest, where the price decreased nine cents to $3.62 per gallon. The East Coast price dropped four cents to $3.73 per gallon, and the Gulf Coast price is $3.54 per gallon, down three cents from last week. The West Coast price is down two cents to $4.05 per gallon, and the Rocky Mountain price is $3.47 per gallon, a penny less than last week.

The national average diesel fuel price decreased four cents to $4.09 per gallon, four cents lower than last year at this time. Prices decreased in all regions of the nation, with the East and West Coast prices dropping a nickel, to $4.12 per gallon and $4.23 per gallon, respectively. The Midwest and Rocky Mountain prices decreased to $4.04 per gallon and $4.01 per gallon, respectively, a decrease of four cents in each region. Rounding out the regions, the Gulf Coast price dropped three cents to $4.04 per gallon.

Propane inventories decline
U.S. propane stocks fell 2.7 million barrels to end at 43.0 million barrels last week, yet are 0.8 million barrels (1.9 percent) higher than the same period a year ago. Midwest inventories dropped by 1.6 million barrels, and Gulf Coast regional inventories declined by 1.0 million barrels. East Coast stocks dropped by 0.1 million barrels, and stocks in the Rocky Mountain/West Coast region also declined by 0.1 million barrels. Propylene non-fuel-use inventories represented 7.1 percent of total propane inventories.

Residential heating oil prices decrease while residential propane prices remain flat
Residential heating oil prices decreased during the period ending March 11, 2013. The average residential heating oil price fell by nearly 2 cents to $4.04 per gallon, almost 7 cents per gallon lower than the same time last year. Wholesale heating oil prices increased by 4 cents to $3.14 per gallon, 23 cents per gallon less than last year at this time.

The average residential propane price remained unchanged, holding at $2.49 per gallon for the fourth consecutive week, almost 38 cents per gallon lower than the same period last year. Wholesale propane prices decreased by less than a penny to remain at $0.97 per gallon for the week ending March 11, 2013, 35 cents per gallon lower than the March 12, 2012 price.

The last data collection for the 2012-2013 SHOPP season will be published next week on Wednesday, March 20, 2013.

Text from the previous editions of This Week In Petroleum is accessible through a link at the top right-hand corner of this page.

View the original article here

OPEC Crude Oil Production Seen Declining in 2013 (3/13/2013)

Released:  March 13, 2013
Next Release:  March 20, 2013

Total crude oil production by the members of the Organization of the Petroleum Exporting Countries (OPEC) averaged 30.3 million barrels per day (bbl/d) in fourth-quarter 2012, down from 31.1 million bbl/d in the prior quarter. In the March Short-Term Energy Outlook (STEO), EIA projects that OPEC will cut crude oil production from an average of 30.9 million bbl/d for full-year 2012 to 30.3 million bbl/d in 2013 in response to expected non-OPEC supply growth. Total OPEC petroleum liquids production will not decline as much because of growth in OPEC's condensate and natural gas liquids. When non-crude liquids are included, total projected OPEC production declines from 36.4 million bbl/d in 2012 to 36.0 million bbl/d in 2013.

With liquids production in the United States projected to rise by 835,000 bbl/d in 2013, and Saudi Arabia continuing in its traditional role as the main swing producer among the OPEC countries, it is likely that total U.S. liquids production will exceed that of Saudi Arabia this year. However, as discussed in a recent article (see EIA's This Week in Petroleum December 19, 2012), the ordering of producers depends upon accounting conventions used to make the comparison. While both U.S. and Saudi production trends are closely watched by market analysts, any future crossing of production paths is more likely to fall into the category of an interesting factoid rather than a watershed event. Regardless of how much the United States is able to reduce its reliance on imported liquid fuels, it will not be insulated from price shocks that affect the global oil market. And Saudi Arabia will likely continue in its unique role as the only holder of significant spare oil production capacity among world oil producers.

The forecast reduction in production by OPEC member countries during 2013 suggests an increase in world surplus production capacity, a widely-watched oil market indicator. EIA estimates that OPEC surplus production capacity was about 2.8 million bbl/d in February, an increase of 0.8 million bbl/d over year-ago levels, but still 0.2 million bbl/d lower than the previous three-year average. Based on EIA projections, OPEC surplus capacity will average 2.9 million bbl/d in 2013 and 3.4 million bbl/d in 2014. In all cases, Saudi Arabia is the dominant holder of surplus capacity. These estimates do not include additional capacity that may be available in Iran but that is currently offline because of the effects of U.S. and European Union sanctions on Iran's ability to sell its oil.

While the sanctions on Iran have been an ongoing story, the death of Venezuelan President Hugo Chávez and the outcome of the ensuing succession process could have implications for that country's oil sector. For now, EIA is maintaining its Venezuelan production forecast on the assumption that current policies related to the oil sector are continued. For more information, see "Political risks focus attention on supply of Venezuelan oil to the United States."

EIA has lowered its expectations for oil production in Libya to reflect persistence of the technical problems and political pressures that have already curtailed output. Libya's precarious security environment creates downside production risk from the potential for additional disruptions due to attacks, strikes, or poorly maintained infrastructure.

In Iraq, payment disputes between Baghdad and the Kurdistan Regional Government are projected to lead to loss of output in the north that, at least partly, offsets increased crude oil exports from Iraq's southern fields. EIA, like many others, has frequently revised its expectations for Iraqi production growth downward because of ongoing political difficulties.

Since 2007, Angolan production increases have been followed by subsequent declines. Technical and maintenance problems have plagued some of Angola's deepwater fields for years, particularly the Greater Plutonio project, and will continue to limit Angola's crude oil production over the STEO forecast period. Nonetheless, EIA still anticipates Angolan crude oil output to gradually increase over the next two years as new deepwater production more than offsets chronic maintenance–related declines.

Gasoline and diesel fuel prices both fall again
The U.S. average retail price of regular gasoline decreased five cents to $3.71 per gallon, down 12 cents from last year at this time. Prices declined in all regions of the nation, with the largest decrease in the Midwest, where the price decreased nine cents to $3.62 per gallon. The East Coast price dropped four cents to $3.73 per gallon, and the Gulf Coast price is $3.54 per gallon, down three cents from last week. The West Coast price is down two cents to $4.05 per gallon, and the Rocky Mountain price is $3.47 per gallon, a penny less than last week.

The national average diesel fuel price decreased four cents to $4.09 per gallon, four cents lower than last year at this time. Prices decreased in all regions of the nation, with the East and West Coast prices dropping a nickel, to $4.12 per gallon and $4.23 per gallon, respectively. The Midwest and Rocky Mountain prices decreased to $4.04 per gallon and $4.01 per gallon, respectively, a decrease of four cents in each region. Rounding out the regions, the Gulf Coast price dropped three cents to $4.04 per gallon.

Propane inventories decline
U.S. propane stocks fell 2.7 million barrels to end at 43.0 million barrels last week, yet are 0.8 million barrels (1.9 percent) higher than the same period a year ago. Midwest inventories dropped by 1.6 million barrels, and Gulf Coast regional inventories declined by 1.0 million barrels. East Coast stocks dropped by 0.1 million barrels, and stocks in the Rocky Mountain/West Coast region also declined by 0.1 million barrels. Propylene non-fuel-use inventories represented 7.1 percent of total propane inventories.

Residential heating oil prices decrease while residential propane prices remain flat
Residential heating oil prices decreased during the period ending March 11, 2013. The average residential heating oil price fell by nearly 2 cents to $4.04 per gallon, almost 7 cents per gallon lower than the same time last year. Wholesale heating oil prices increased by 4 cents to $3.14 per gallon, 23 cents per gallon less than last year at this time.

The average residential propane price remained unchanged, holding at $2.49 per gallon for the fourth consecutive week, almost 38 cents per gallon lower than the same period last year. Wholesale propane prices decreased by less than a penny to remain at $0.97 per gallon for the week ending March 11, 2013, 35 cents per gallon lower than the March 12, 2012 price.

The last data collection for the 2012-2013 SHOPP season will be published next week on Wednesday, March 20, 2013.

Text from the previous editions of This Week In Petroleum is accessible through a link at the top right-hand corner of this page.

View the original article here

Mid-Continent Crude Oil Markets Continue to Adjust to Rapid Rise in Bakken Production (4/3/2013)

Released:  April 3, 2013
Next Release:  April 10, 2013

The differential between West Texas Intermediate (WTI) and North Dakota's Bakken crudes continues to fluctuate, reflecting both production growth and changes in oil transportation capacity. Bakken crude sold at a $25-per-barrel discount to WTI in early 2012 and rose to a $5-per-barrel premium last September, before again being discounted below WTI this winter. So far this year, the gap between Bakken and WTI prices has narrowed, and once again, the Bakken price has risen above the WTI price, albeit modestly (Figure 1).

West Texas Intermediate prices are determined at Cushing, Oklahoma; Bakken prices are those at Clearbrook, Minnesota, where the North Dakota pipeline network joins Enbridge's pipeline running southeast from western Canada. Because of the costs of transporting Bakken crude to Clearbrook, including the pipeline tariff, the price for Bakken at the wellhead will be less than the delivered price at Clearbrook.

The strong growth in Bakken production has frequently outpaced expansion of the local transportation infrastructure, leading to discounts for Bakken crude compared to benchmark WTI. Production in North Dakota, the primary source of Bakken crude, rose 243,000 barrels per day (bbl/d), or 58 percent, in 2012 to 663,000 bbl/d, placing North Dakota second only to Texas in oil production among all states. Meanwhile, pipeline capacity out of the region, which is also used to accommodate increased production of Canadian crude flowing through the region, was estimated at only 395,000 bbl/d in 2012.

Limited pipeline capacity has forced shippers of Bakken crude to use alternative transportation, such as railroads. According to the North Dakota Pipeline Authority, loading capacity at North Dakota rail terminals increased by 660,000 bbl/d between 2007 and the end of 2012, with an additional 355,000 bbl/d of capacity expected to come on line by the end of 2014.

Although transportation of crude oil by rail is generally more expensive than shipping by pipeline, rail-loading capacity has proven cheaper and quicker to build. In addition, the logistical flexibility of rail has enabled Bakken crude to reach refining areas not typically served by pipeline from the Bakken. Historically, crude oil production from the Northern Plains has been discounted against midcontinent crudes to account for the added costs of moving these crudes by pipeline to areas such as Cushing, Oklahoma, and the Gulf Coast (PAD District 3).

Investment in rail offloading capacity at East Coast refineries, such as Philadelphia Energy Solutions's Philadelphia complex, suggests that Bakken offers a cost-competitive alternative to Brent-linked crude imports despite the cost of transporting Bakken by rail from the Midwest. The landed cost of Nigerian crude, the leading source of East Coast imports for most of the past two decades, averaged about $117/bbl in 2012, making Bakken and other domestic crudes economical alternatives. Because of the closure of several East Coast refineries and the availability of cheaper domestic light crude, East Coast imports of Nigerian crude fell from 471,000 bbl/d in 2005 to 166,000 bbl/d in 2012.

For West Coast refineries, cost-competitive access to Bakken crude would allow the Bakken oil to displace more-expensive imports there, as well. West Coast imports, which come primarily from Saudi Arabia, Ecuador, and Iraq, have remained flat since 2006; however, Anacortes, Washington, began receiving unit-train shipments of Bakken in late 2012, potentially signaling new competition for West Coast oil imports.

As Bakken rail shipments reach the East and West coasts, pricing for Bakken crude oil is evolving. The ability to economically reach refineries on the East and West coasts expands the market for Bakken beyond the traditional Midwest and Gulf Coast refineries, which have experienced a glut of midcontinent crudes in recent years. By moving east and west, Bakken escapes the infrastructure constraints that have significantly affected the price of WTI. The Gulf Coast, where Brent-linked imports have already declined significantly, offers less opportunity for Bakken. As light-sweet imports continue to be displaced along the Gulf Coast, Bakken will increasingly compete with other domestic crudes, many of which have lower pipeline transportation costs to the Gulf Coast. As long as Bakken production and transportation capacity scramble to seek equilibrium, continued variation in the differential between Bakken and WTI prices is likely.

Gasoline and diesel fuel prices continue to decrease
The U.S. average retail price of regular gasoline decreased four cents from the previous week to $3.65 per gallon as of April 1, 2013, down 30 cents from last year at this time. The U.S. average price has declined 14 cents over the last five weeks. Prices were lower in all regions of the nation except the Rocky Mountains, where the price is $3.50 per gallon, up three cents from last week. The largest decrease came in the Midwest, where the price dropped six cents to $3.60 per gallon. The East and Gulf Coast prices are both lower by three cents, to $3.63 per gallon and $3.48 per gallon, respectively. Rounding out the regions, the West Coast price is $3.95 per gallon, a decline of two cents.

The national average diesel fuel price decreased one cent to $3.99 per gallon, 15 cents lower than last year at this time. The U.S. average price has decreased 17 cents over the last five weeks. Prices decreased in all regions of the nation except the West Coast, where the price increased two cents to $4.12 per gallon. The largest decrease came on the East Coast, where the price declined three cents to $4.03 per gallon. The Gulf Coast price is $3.92 per gallon, a drop of two cents. The Midwest and Rocky Mountain prices are both lower by a penny, to $3.97 per gallon and $3.92 per gallon, respectively.

Propane inventories decline
U.S. propane stocks fell 1.1 million barrels to end at 39.7 million barrels last week, and are 5.0 million barrels (11.3 percent) lower than the same period a year ago. Gulf Coast inventories dropped by 0.6 million barrels, and Midwest regional inventories declined by 0.4 million barrels. East Coast stocks dropped by 0.1 million barrels, while Rocky Mountain/West Coast inventories decreased slightly. Propylene non-fuel-use inventories represented 9.1 percent of total propane inventories.

Text from the previous editions of This Week In Petroleum is accessible through a link at the top right-hand corner of this page.

View the original article here

OPEC Crude Oil Production Seen Declining in 2013 (3/13/2013)

Released:  March 13, 2013
Next Release:  March 20, 2013

Total crude oil production by the members of the Organization of the Petroleum Exporting Countries (OPEC) averaged 30.3 million barrels per day (bbl/d) in fourth-quarter 2012, down from 31.1 million bbl/d in the prior quarter. In the March Short-Term Energy Outlook (STEO), EIA projects that OPEC will cut crude oil production from an average of 30.9 million bbl/d for full-year 2012 to 30.3 million bbl/d in 2013 in response to expected non-OPEC supply growth. Total OPEC petroleum liquids production will not decline as much because of growth in OPEC's condensate and natural gas liquids. When non-crude liquids are included, total projected OPEC production declines from 36.4 million bbl/d in 2012 to 36.0 million bbl/d in 2013.

With liquids production in the United States projected to rise by 835,000 bbl/d in 2013, and Saudi Arabia continuing in its traditional role as the main swing producer among the OPEC countries, it is likely that total U.S. liquids production will exceed that of Saudi Arabia this year. However, as discussed in a recent article (see EIA's This Week in Petroleum December 19, 2012), the ordering of producers depends upon accounting conventions used to make the comparison. While both U.S. and Saudi production trends are closely watched by market analysts, any future crossing of production paths is more likely to fall into the category of an interesting factoid rather than a watershed event. Regardless of how much the United States is able to reduce its reliance on imported liquid fuels, it will not be insulated from price shocks that affect the global oil market. And Saudi Arabia will likely continue in its unique role as the only holder of significant spare oil production capacity among world oil producers.

The forecast reduction in production by OPEC member countries during 2013 suggests an increase in world surplus production capacity, a widely-watched oil market indicator. EIA estimates that OPEC surplus production capacity was about 2.8 million bbl/d in February, an increase of 0.8 million bbl/d over year-ago levels, but still 0.2 million bbl/d lower than the previous three-year average. Based on EIA projections, OPEC surplus capacity will average 2.9 million bbl/d in 2013 and 3.4 million bbl/d in 2014. In all cases, Saudi Arabia is the dominant holder of surplus capacity. These estimates do not include additional capacity that may be available in Iran but that is currently offline because of the effects of U.S. and European Union sanctions on Iran's ability to sell its oil.

While the sanctions on Iran have been an ongoing story, the death of Venezuelan President Hugo Chávez and the outcome of the ensuing succession process could have implications for that country's oil sector. For now, EIA is maintaining its Venezuelan production forecast on the assumption that current policies related to the oil sector are continued. For more information, see "Political risks focus attention on supply of Venezuelan oil to the United States."

EIA has lowered its expectations for oil production in Libya to reflect persistence of the technical problems and political pressures that have already curtailed output. Libya's precarious security environment creates downside production risk from the potential for additional disruptions due to attacks, strikes, or poorly maintained infrastructure.

In Iraq, payment disputes between Baghdad and the Kurdistan Regional Government are projected to lead to loss of output in the north that, at least partly, offsets increased crude oil exports from Iraq's southern fields. EIA, like many others, has frequently revised its expectations for Iraqi production growth downward because of ongoing political difficulties.

Since 2007, Angolan production increases have been followed by subsequent declines. Technical and maintenance problems have plagued some of Angola's deepwater fields for years, particularly the Greater Plutonio project, and will continue to limit Angola's crude oil production over the STEO forecast period. Nonetheless, EIA still anticipates Angolan crude oil output to gradually increase over the next two years as new deepwater production more than offsets chronic maintenance–related declines.

Gasoline and diesel fuel prices both fall again
The U.S. average retail price of regular gasoline decreased five cents to $3.71 per gallon, down 12 cents from last year at this time. Prices declined in all regions of the nation, with the largest decrease in the Midwest, where the price decreased nine cents to $3.62 per gallon. The East Coast price dropped four cents to $3.73 per gallon, and the Gulf Coast price is $3.54 per gallon, down three cents from last week. The West Coast price is down two cents to $4.05 per gallon, and the Rocky Mountain price is $3.47 per gallon, a penny less than last week.

The national average diesel fuel price decreased four cents to $4.09 per gallon, four cents lower than last year at this time. Prices decreased in all regions of the nation, with the East and West Coast prices dropping a nickel, to $4.12 per gallon and $4.23 per gallon, respectively. The Midwest and Rocky Mountain prices decreased to $4.04 per gallon and $4.01 per gallon, respectively, a decrease of four cents in each region. Rounding out the regions, the Gulf Coast price dropped three cents to $4.04 per gallon.

Propane inventories decline
U.S. propane stocks fell 2.7 million barrels to end at 43.0 million barrels last week, yet are 0.8 million barrels (1.9 percent) higher than the same period a year ago. Midwest inventories dropped by 1.6 million barrels, and Gulf Coast regional inventories declined by 1.0 million barrels. East Coast stocks dropped by 0.1 million barrels, and stocks in the Rocky Mountain/West Coast region also declined by 0.1 million barrels. Propylene non-fuel-use inventories represented 7.1 percent of total propane inventories.

Residential heating oil prices decrease while residential propane prices remain flat
Residential heating oil prices decreased during the period ending March 11, 2013. The average residential heating oil price fell by nearly 2 cents to $4.04 per gallon, almost 7 cents per gallon lower than the same time last year. Wholesale heating oil prices increased by 4 cents to $3.14 per gallon, 23 cents per gallon less than last year at this time.

The average residential propane price remained unchanged, holding at $2.49 per gallon for the fourth consecutive week, almost 38 cents per gallon lower than the same period last year. Wholesale propane prices decreased by less than a penny to remain at $0.97 per gallon for the week ending March 11, 2013, 35 cents per gallon lower than the March 12, 2012 price.

The last data collection for the 2012-2013 SHOPP season will be published next week on Wednesday, March 20, 2013.

Text from the previous editions of This Week In Petroleum is accessible through a link at the top right-hand corner of this page.

View the original article here

Mid-Continent Crude Oil Markets Continue to Adjust to Rapid Rise in Bakken Production (4/3/2013)

Released:  April 3, 2013
Next Release:  April 10, 2013

The differential between West Texas Intermediate (WTI) and North Dakota's Bakken crudes continues to fluctuate, reflecting both production growth and changes in oil transportation capacity. Bakken crude sold at a $25-per-barrel discount to WTI in early 2012 and rose to a $5-per-barrel premium last September, before again being discounted below WTI this winter. So far this year, the gap between Bakken and WTI prices has narrowed, and once again, the Bakken price has risen above the WTI price, albeit modestly (Figure 1).

West Texas Intermediate prices are determined at Cushing, Oklahoma; Bakken prices are those at Clearbrook, Minnesota, where the North Dakota pipeline network joins Enbridge's pipeline running southeast from western Canada. Because of the costs of transporting Bakken crude to Clearbrook, including the pipeline tariff, the price for Bakken at the wellhead will be less than the delivered price at Clearbrook.

The strong growth in Bakken production has frequently outpaced expansion of the local transportation infrastructure, leading to discounts for Bakken crude compared to benchmark WTI. Production in North Dakota, the primary source of Bakken crude, rose 243,000 barrels per day (bbl/d), or 58 percent, in 2012 to 663,000 bbl/d, placing North Dakota second only to Texas in oil production among all states. Meanwhile, pipeline capacity out of the region, which is also used to accommodate increased production of Canadian crude flowing through the region, was estimated at only 395,000 bbl/d in 2012.

Limited pipeline capacity has forced shippers of Bakken crude to use alternative transportation, such as railroads. According to the North Dakota Pipeline Authority, loading capacity at North Dakota rail terminals increased by 660,000 bbl/d between 2007 and the end of 2012, with an additional 355,000 bbl/d of capacity expected to come on line by the end of 2014.

Although transportation of crude oil by rail is generally more expensive than shipping by pipeline, rail-loading capacity has proven cheaper and quicker to build. In addition, the logistical flexibility of rail has enabled Bakken crude to reach refining areas not typically served by pipeline from the Bakken. Historically, crude oil production from the Northern Plains has been discounted against midcontinent crudes to account for the added costs of moving these crudes by pipeline to areas such as Cushing, Oklahoma, and the Gulf Coast (PAD District 3).

Investment in rail offloading capacity at East Coast refineries, such as Philadelphia Energy Solutions's Philadelphia complex, suggests that Bakken offers a cost-competitive alternative to Brent-linked crude imports despite the cost of transporting Bakken by rail from the Midwest. The landed cost of Nigerian crude, the leading source of East Coast imports for most of the past two decades, averaged about $117/bbl in 2012, making Bakken and other domestic crudes economical alternatives. Because of the closure of several East Coast refineries and the availability of cheaper domestic light crude, East Coast imports of Nigerian crude fell from 471,000 bbl/d in 2005 to 166,000 bbl/d in 2012.

For West Coast refineries, cost-competitive access to Bakken crude would allow the Bakken oil to displace more-expensive imports there, as well. West Coast imports, which come primarily from Saudi Arabia, Ecuador, and Iraq, have remained flat since 2006; however, Anacortes, Washington, began receiving unit-train shipments of Bakken in late 2012, potentially signaling new competition for West Coast oil imports.

As Bakken rail shipments reach the East and West coasts, pricing for Bakken crude oil is evolving. The ability to economically reach refineries on the East and West coasts expands the market for Bakken beyond the traditional Midwest and Gulf Coast refineries, which have experienced a glut of midcontinent crudes in recent years. By moving east and west, Bakken escapes the infrastructure constraints that have significantly affected the price of WTI. The Gulf Coast, where Brent-linked imports have already declined significantly, offers less opportunity for Bakken. As light-sweet imports continue to be displaced along the Gulf Coast, Bakken will increasingly compete with other domestic crudes, many of which have lower pipeline transportation costs to the Gulf Coast. As long as Bakken production and transportation capacity scramble to seek equilibrium, continued variation in the differential between Bakken and WTI prices is likely.

Gasoline and diesel fuel prices continue to decrease
The U.S. average retail price of regular gasoline decreased four cents from the previous week to $3.65 per gallon as of April 1, 2013, down 30 cents from last year at this time. The U.S. average price has declined 14 cents over the last five weeks. Prices were lower in all regions of the nation except the Rocky Mountains, where the price is $3.50 per gallon, up three cents from last week. The largest decrease came in the Midwest, where the price dropped six cents to $3.60 per gallon. The East and Gulf Coast prices are both lower by three cents, to $3.63 per gallon and $3.48 per gallon, respectively. Rounding out the regions, the West Coast price is $3.95 per gallon, a decline of two cents.

The national average diesel fuel price decreased one cent to $3.99 per gallon, 15 cents lower than last year at this time. The U.S. average price has decreased 17 cents over the last five weeks. Prices decreased in all regions of the nation except the West Coast, where the price increased two cents to $4.12 per gallon. The largest decrease came on the East Coast, where the price declined three cents to $4.03 per gallon. The Gulf Coast price is $3.92 per gallon, a drop of two cents. The Midwest and Rocky Mountain prices are both lower by a penny, to $3.97 per gallon and $3.92 per gallon, respectively.

Propane inventories decline
U.S. propane stocks fell 1.1 million barrels to end at 39.7 million barrels last week, and are 5.0 million barrels (11.3 percent) lower than the same period a year ago. Gulf Coast inventories dropped by 0.6 million barrels, and Midwest regional inventories declined by 0.4 million barrels. East Coast stocks dropped by 0.1 million barrels, while Rocky Mountain/West Coast inventories decreased slightly. Propylene non-fuel-use inventories represented 9.1 percent of total propane inventories.

Text from the previous editions of This Week In Petroleum is accessible through a link at the top right-hand corner of this page.

View the original article here

OPEC Crude Oil Production Seen Declining in 2013 (3/13/2013)

Released:  March 13, 2013
Next Release:  March 20, 2013

Total crude oil production by the members of the Organization of the Petroleum Exporting Countries (OPEC) averaged 30.3 million barrels per day (bbl/d) in fourth-quarter 2012, down from 31.1 million bbl/d in the prior quarter. In the March Short-Term Energy Outlook (STEO), EIA projects that OPEC will cut crude oil production from an average of 30.9 million bbl/d for full-year 2012 to 30.3 million bbl/d in 2013 in response to expected non-OPEC supply growth. Total OPEC petroleum liquids production will not decline as much because of growth in OPEC's condensate and natural gas liquids. When non-crude liquids are included, total projected OPEC production declines from 36.4 million bbl/d in 2012 to 36.0 million bbl/d in 2013.

With liquids production in the United States projected to rise by 835,000 bbl/d in 2013, and Saudi Arabia continuing in its traditional role as the main swing producer among the OPEC countries, it is likely that total U.S. liquids production will exceed that of Saudi Arabia this year. However, as discussed in a recent article (see EIA's This Week in Petroleum December 19, 2012), the ordering of producers depends upon accounting conventions used to make the comparison. While both U.S. and Saudi production trends are closely watched by market analysts, any future crossing of production paths is more likely to fall into the category of an interesting factoid rather than a watershed event. Regardless of how much the United States is able to reduce its reliance on imported liquid fuels, it will not be insulated from price shocks that affect the global oil market. And Saudi Arabia will likely continue in its unique role as the only holder of significant spare oil production capacity among world oil producers.

The forecast reduction in production by OPEC member countries during 2013 suggests an increase in world surplus production capacity, a widely-watched oil market indicator. EIA estimates that OPEC surplus production capacity was about 2.8 million bbl/d in February, an increase of 0.8 million bbl/d over year-ago levels, but still 0.2 million bbl/d lower than the previous three-year average. Based on EIA projections, OPEC surplus capacity will average 2.9 million bbl/d in 2013 and 3.4 million bbl/d in 2014. In all cases, Saudi Arabia is the dominant holder of surplus capacity. These estimates do not include additional capacity that may be available in Iran but that is currently offline because of the effects of U.S. and European Union sanctions on Iran's ability to sell its oil.

While the sanctions on Iran have been an ongoing story, the death of Venezuelan President Hugo Chávez and the outcome of the ensuing succession process could have implications for that country's oil sector. For now, EIA is maintaining its Venezuelan production forecast on the assumption that current policies related to the oil sector are continued. For more information, see "Political risks focus attention on supply of Venezuelan oil to the United States."

EIA has lowered its expectations for oil production in Libya to reflect persistence of the technical problems and political pressures that have already curtailed output. Libya's precarious security environment creates downside production risk from the potential for additional disruptions due to attacks, strikes, or poorly maintained infrastructure.

In Iraq, payment disputes between Baghdad and the Kurdistan Regional Government are projected to lead to loss of output in the north that, at least partly, offsets increased crude oil exports from Iraq's southern fields. EIA, like many others, has frequently revised its expectations for Iraqi production growth downward because of ongoing political difficulties.

Since 2007, Angolan production increases have been followed by subsequent declines. Technical and maintenance problems have plagued some of Angola's deepwater fields for years, particularly the Greater Plutonio project, and will continue to limit Angola's crude oil production over the STEO forecast period. Nonetheless, EIA still anticipates Angolan crude oil output to gradually increase over the next two years as new deepwater production more than offsets chronic maintenance–related declines.

Gasoline and diesel fuel prices both fall again
The U.S. average retail price of regular gasoline decreased five cents to $3.71 per gallon, down 12 cents from last year at this time. Prices declined in all regions of the nation, with the largest decrease in the Midwest, where the price decreased nine cents to $3.62 per gallon. The East Coast price dropped four cents to $3.73 per gallon, and the Gulf Coast price is $3.54 per gallon, down three cents from last week. The West Coast price is down two cents to $4.05 per gallon, and the Rocky Mountain price is $3.47 per gallon, a penny less than last week.

The national average diesel fuel price decreased four cents to $4.09 per gallon, four cents lower than last year at this time. Prices decreased in all regions of the nation, with the East and West Coast prices dropping a nickel, to $4.12 per gallon and $4.23 per gallon, respectively. The Midwest and Rocky Mountain prices decreased to $4.04 per gallon and $4.01 per gallon, respectively, a decrease of four cents in each region. Rounding out the regions, the Gulf Coast price dropped three cents to $4.04 per gallon.

Propane inventories decline
U.S. propane stocks fell 2.7 million barrels to end at 43.0 million barrels last week, yet are 0.8 million barrels (1.9 percent) higher than the same period a year ago. Midwest inventories dropped by 1.6 million barrels, and Gulf Coast regional inventories declined by 1.0 million barrels. East Coast stocks dropped by 0.1 million barrels, and stocks in the Rocky Mountain/West Coast region also declined by 0.1 million barrels. Propylene non-fuel-use inventories represented 7.1 percent of total propane inventories.

Residential heating oil prices decrease while residential propane prices remain flat
Residential heating oil prices decreased during the period ending March 11, 2013. The average residential heating oil price fell by nearly 2 cents to $4.04 per gallon, almost 7 cents per gallon lower than the same time last year. Wholesale heating oil prices increased by 4 cents to $3.14 per gallon, 23 cents per gallon less than last year at this time.

The average residential propane price remained unchanged, holding at $2.49 per gallon for the fourth consecutive week, almost 38 cents per gallon lower than the same period last year. Wholesale propane prices decreased by less than a penny to remain at $0.97 per gallon for the week ending March 11, 2013, 35 cents per gallon lower than the March 12, 2012 price.

The last data collection for the 2012-2013 SHOPP season will be published next week on Wednesday, March 20, 2013.

Text from the previous editions of This Week In Petroleum is accessible through a link at the top right-hand corner of this page.

View the original article here

OPEC Crude Oil Production Seen Declining in 2013 (3/13/2013)

Released:  March 13, 2013
Next Release:  March 20, 2013

Total crude oil production by the members of the Organization of the Petroleum Exporting Countries (OPEC) averaged 30.3 million barrels per day (bbl/d) in fourth-quarter 2012, down from 31.1 million bbl/d in the prior quarter. In the March Short-Term Energy Outlook (STEO), EIA projects that OPEC will cut crude oil production from an average of 30.9 million bbl/d for full-year 2012 to 30.3 million bbl/d in 2013 in response to expected non-OPEC supply growth. Total OPEC petroleum liquids production will not decline as much because of growth in OPEC's condensate and natural gas liquids. When non-crude liquids are included, total projected OPEC production declines from 36.4 million bbl/d in 2012 to 36.0 million bbl/d in 2013.

With liquids production in the United States projected to rise by 835,000 bbl/d in 2013, and Saudi Arabia continuing in its traditional role as the main swing producer among the OPEC countries, it is likely that total U.S. liquids production will exceed that of Saudi Arabia this year. However, as discussed in a recent article (see EIA's This Week in Petroleum December 19, 2012), the ordering of producers depends upon accounting conventions used to make the comparison. While both U.S. and Saudi production trends are closely watched by market analysts, any future crossing of production paths is more likely to fall into the category of an interesting factoid rather than a watershed event. Regardless of how much the United States is able to reduce its reliance on imported liquid fuels, it will not be insulated from price shocks that affect the global oil market. And Saudi Arabia will likely continue in its unique role as the only holder of significant spare oil production capacity among world oil producers.

The forecast reduction in production by OPEC member countries during 2013 suggests an increase in world surplus production capacity, a widely-watched oil market indicator. EIA estimates that OPEC surplus production capacity was about 2.8 million bbl/d in February, an increase of 0.8 million bbl/d over year-ago levels, but still 0.2 million bbl/d lower than the previous three-year average. Based on EIA projections, OPEC surplus capacity will average 2.9 million bbl/d in 2013 and 3.4 million bbl/d in 2014. In all cases, Saudi Arabia is the dominant holder of surplus capacity. These estimates do not include additional capacity that may be available in Iran but that is currently offline because of the effects of U.S. and European Union sanctions on Iran's ability to sell its oil.

While the sanctions on Iran have been an ongoing story, the death of Venezuelan President Hugo Chávez and the outcome of the ensuing succession process could have implications for that country's oil sector. For now, EIA is maintaining its Venezuelan production forecast on the assumption that current policies related to the oil sector are continued. For more information, see "Political risks focus attention on supply of Venezuelan oil to the United States."

EIA has lowered its expectations for oil production in Libya to reflect persistence of the technical problems and political pressures that have already curtailed output. Libya's precarious security environment creates downside production risk from the potential for additional disruptions due to attacks, strikes, or poorly maintained infrastructure.

In Iraq, payment disputes between Baghdad and the Kurdistan Regional Government are projected to lead to loss of output in the north that, at least partly, offsets increased crude oil exports from Iraq's southern fields. EIA, like many others, has frequently revised its expectations for Iraqi production growth downward because of ongoing political difficulties.

Since 2007, Angolan production increases have been followed by subsequent declines. Technical and maintenance problems have plagued some of Angola's deepwater fields for years, particularly the Greater Plutonio project, and will continue to limit Angola's crude oil production over the STEO forecast period. Nonetheless, EIA still anticipates Angolan crude oil output to gradually increase over the next two years as new deepwater production more than offsets chronic maintenance–related declines.

Gasoline and diesel fuel prices both fall again
The U.S. average retail price of regular gasoline decreased five cents to $3.71 per gallon, down 12 cents from last year at this time. Prices declined in all regions of the nation, with the largest decrease in the Midwest, where the price decreased nine cents to $3.62 per gallon. The East Coast price dropped four cents to $3.73 per gallon, and the Gulf Coast price is $3.54 per gallon, down three cents from last week. The West Coast price is down two cents to $4.05 per gallon, and the Rocky Mountain price is $3.47 per gallon, a penny less than last week.

The national average diesel fuel price decreased four cents to $4.09 per gallon, four cents lower than last year at this time. Prices decreased in all regions of the nation, with the East and West Coast prices dropping a nickel, to $4.12 per gallon and $4.23 per gallon, respectively. The Midwest and Rocky Mountain prices decreased to $4.04 per gallon and $4.01 per gallon, respectively, a decrease of four cents in each region. Rounding out the regions, the Gulf Coast price dropped three cents to $4.04 per gallon.

Propane inventories decline
U.S. propane stocks fell 2.7 million barrels to end at 43.0 million barrels last week, yet are 0.8 million barrels (1.9 percent) higher than the same period a year ago. Midwest inventories dropped by 1.6 million barrels, and Gulf Coast regional inventories declined by 1.0 million barrels. East Coast stocks dropped by 0.1 million barrels, and stocks in the Rocky Mountain/West Coast region also declined by 0.1 million barrels. Propylene non-fuel-use inventories represented 7.1 percent of total propane inventories.

Residential heating oil prices decrease while residential propane prices remain flat
Residential heating oil prices decreased during the period ending March 11, 2013. The average residential heating oil price fell by nearly 2 cents to $4.04 per gallon, almost 7 cents per gallon lower than the same time last year. Wholesale heating oil prices increased by 4 cents to $3.14 per gallon, 23 cents per gallon less than last year at this time.

The average residential propane price remained unchanged, holding at $2.49 per gallon for the fourth consecutive week, almost 38 cents per gallon lower than the same period last year. Wholesale propane prices decreased by less than a penny to remain at $0.97 per gallon for the week ending March 11, 2013, 35 cents per gallon lower than the March 12, 2012 price.

The last data collection for the 2012-2013 SHOPP season will be published next week on Wednesday, March 20, 2013.

Text from the previous editions of This Week In Petroleum is accessible through a link at the top right-hand corner of this page.

View the original article here

Mid-Continent Crude Oil Markets Continue to Adjust to Rapid Rise in Bakken Production (4/3/2013)

Released:  April 3, 2013
Next Release:  April 10, 2013

The differential between West Texas Intermediate (WTI) and North Dakota's Bakken crudes continues to fluctuate, reflecting both production growth and changes in oil transportation capacity. Bakken crude sold at a $25-per-barrel discount to WTI in early 2012 and rose to a $5-per-barrel premium last September, before again being discounted below WTI this winter. So far this year, the gap between Bakken and WTI prices has narrowed, and once again, the Bakken price has risen above the WTI price, albeit modestly (Figure 1).

West Texas Intermediate prices are determined at Cushing, Oklahoma; Bakken prices are those at Clearbrook, Minnesota, where the North Dakota pipeline network joins Enbridge's pipeline running southeast from western Canada. Because of the costs of transporting Bakken crude to Clearbrook, including the pipeline tariff, the price for Bakken at the wellhead will be less than the delivered price at Clearbrook.

The strong growth in Bakken production has frequently outpaced expansion of the local transportation infrastructure, leading to discounts for Bakken crude compared to benchmark WTI. Production in North Dakota, the primary source of Bakken crude, rose 243,000 barrels per day (bbl/d), or 58 percent, in 2012 to 663,000 bbl/d, placing North Dakota second only to Texas in oil production among all states. Meanwhile, pipeline capacity out of the region, which is also used to accommodate increased production of Canadian crude flowing through the region, was estimated at only 395,000 bbl/d in 2012.

Limited pipeline capacity has forced shippers of Bakken crude to use alternative transportation, such as railroads. According to the North Dakota Pipeline Authority, loading capacity at North Dakota rail terminals increased by 660,000 bbl/d between 2007 and the end of 2012, with an additional 355,000 bbl/d of capacity expected to come on line by the end of 2014.

Although transportation of crude oil by rail is generally more expensive than shipping by pipeline, rail-loading capacity has proven cheaper and quicker to build. In addition, the logistical flexibility of rail has enabled Bakken crude to reach refining areas not typically served by pipeline from the Bakken. Historically, crude oil production from the Northern Plains has been discounted against midcontinent crudes to account for the added costs of moving these crudes by pipeline to areas such as Cushing, Oklahoma, and the Gulf Coast (PAD District 3).

Investment in rail offloading capacity at East Coast refineries, such as Philadelphia Energy Solutions's Philadelphia complex, suggests that Bakken offers a cost-competitive alternative to Brent-linked crude imports despite the cost of transporting Bakken by rail from the Midwest. The landed cost of Nigerian crude, the leading source of East Coast imports for most of the past two decades, averaged about $117/bbl in 2012, making Bakken and other domestic crudes economical alternatives. Because of the closure of several East Coast refineries and the availability of cheaper domestic light crude, East Coast imports of Nigerian crude fell from 471,000 bbl/d in 2005 to 166,000 bbl/d in 2012.

For West Coast refineries, cost-competitive access to Bakken crude would allow the Bakken oil to displace more-expensive imports there, as well. West Coast imports, which come primarily from Saudi Arabia, Ecuador, and Iraq, have remained flat since 2006; however, Anacortes, Washington, began receiving unit-train shipments of Bakken in late 2012, potentially signaling new competition for West Coast oil imports.

As Bakken rail shipments reach the East and West coasts, pricing for Bakken crude oil is evolving. The ability to economically reach refineries on the East and West coasts expands the market for Bakken beyond the traditional Midwest and Gulf Coast refineries, which have experienced a glut of midcontinent crudes in recent years. By moving east and west, Bakken escapes the infrastructure constraints that have significantly affected the price of WTI. The Gulf Coast, where Brent-linked imports have already declined significantly, offers less opportunity for Bakken. As light-sweet imports continue to be displaced along the Gulf Coast, Bakken will increasingly compete with other domestic crudes, many of which have lower pipeline transportation costs to the Gulf Coast. As long as Bakken production and transportation capacity scramble to seek equilibrium, continued variation in the differential between Bakken and WTI prices is likely.

Gasoline and diesel fuel prices continue to decrease
The U.S. average retail price of regular gasoline decreased four cents from the previous week to $3.65 per gallon as of April 1, 2013, down 30 cents from last year at this time. The U.S. average price has declined 14 cents over the last five weeks. Prices were lower in all regions of the nation except the Rocky Mountains, where the price is $3.50 per gallon, up three cents from last week. The largest decrease came in the Midwest, where the price dropped six cents to $3.60 per gallon. The East and Gulf Coast prices are both lower by three cents, to $3.63 per gallon and $3.48 per gallon, respectively. Rounding out the regions, the West Coast price is $3.95 per gallon, a decline of two cents.

The national average diesel fuel price decreased one cent to $3.99 per gallon, 15 cents lower than last year at this time. The U.S. average price has decreased 17 cents over the last five weeks. Prices decreased in all regions of the nation except the West Coast, where the price increased two cents to $4.12 per gallon. The largest decrease came on the East Coast, where the price declined three cents to $4.03 per gallon. The Gulf Coast price is $3.92 per gallon, a drop of two cents. The Midwest and Rocky Mountain prices are both lower by a penny, to $3.97 per gallon and $3.92 per gallon, respectively.

Propane inventories decline
U.S. propane stocks fell 1.1 million barrels to end at 39.7 million barrels last week, and are 5.0 million barrels (11.3 percent) lower than the same period a year ago. Gulf Coast inventories dropped by 0.6 million barrels, and Midwest regional inventories declined by 0.4 million barrels. East Coast stocks dropped by 0.1 million barrels, while Rocky Mountain/West Coast inventories decreased slightly. Propylene non-fuel-use inventories represented 9.1 percent of total propane inventories.

Text from the previous editions of This Week In Petroleum is accessible through a link at the top right-hand corner of this page.

View the original article here

Two Wyoming mines accounted for 20% of U.S. coal production by tons in 2012

March 29, 2013
Source: U.S. Department of Labor, Mine Safety and Health Administration, Form 7000-2, Quarterly Mine Employment and Coal Production Report.
Note: Powder River Basin coal has a lower thermal content, typically 8,400-8,800 Btu per pound, compared with Eastern coal, which averages 12,000-13,000 Btu per pound.

Preliminary coal production data for 2012 show that 9 out of the top 10 producing coal mines in the United States are located in Wyoming; the top two producing mines in Wyoming account for 20% of total U.S. coal production by tonnage. Collectively, the top 10 mines accounted for 38% of total U.S. coal production by tonnage in 2012. Shares of production by energy content for the top mines are somewhat lower since the sub-bituminous coal they produce has lower heat content per ton than bituminous coal produced in other regions.

Source: U.S. Department of Labor, Mine Safety and Health Administration, Form 7000-2, Quarterly Mine Employment and Coal Production Report.
Note: Powder River Basin coal has a lower thermal content, typically 8,400-8,800 Btu per pound, compared with Eastern coal, which averages 12,000-13,000 Btu per pound.

All of the top 10 producing coal mines in the United States are sub-bituminous, surface mining operations, and each mine is located in the Powder River Basin. The lone mine in the top 10 not located in Wyoming is the Spring Creek Mine in Montana. The nation's top producing mine in 2012 was the North Antelope Rochelle Mine, which produced 108 million short tons, followed by the Black Thunder Mine, which produced 93.1 million short tons. Individually, each of these two mines produced more coal than the entire state of Kentucky (90.6 million short tons), which was the third largest coal producing state in 2012.

Thick beds and large-scale operations make Wyoming's sub-bituminous mines the lowest-cost mines in the United States. EIA's energy production estimates show that coal from Wyoming leads the United States in terms of the energy content, measured in British thermal units (Btu). However, while Wyoming consistently produces the most coal in the United States by volume (401 million short tons in 2012), long rail transport distances, limited coal export capacity, and the lower heat content of sub-bituminous coal limit its use.

Both spot and contract prices for Powder River Basin (PRB) coal are lower than for other coals. Current spot prices for PRB coal are approximately $10.25 per ton. Actual delivered costs tend to be much higher because PRB coal is mostly transported long distances by rail. Transportation and handling charges for PRB coal can be as much as $25-$35 per ton when delivered to markets in the Southeast and the Ohio Valley.

View the original article here

Mid-Continent Crude Oil Markets Continue to Adjust to Rapid Rise in Bakken Production (4/3/2013)

Released:  April 3, 2013
Next Release:  April 10, 2013

The differential between West Texas Intermediate (WTI) and North Dakota's Bakken crudes continues to fluctuate, reflecting both production growth and changes in oil transportation capacity. Bakken crude sold at a $25-per-barrel discount to WTI in early 2012 and rose to a $5-per-barrel premium last September, before again being discounted below WTI this winter. So far this year, the gap between Bakken and WTI prices has narrowed, and once again, the Bakken price has risen above the WTI price, albeit modestly (Figure 1).

West Texas Intermediate prices are determined at Cushing, Oklahoma; Bakken prices are those at Clearbrook, Minnesota, where the North Dakota pipeline network joins Enbridge's pipeline running southeast from western Canada. Because of the costs of transporting Bakken crude to Clearbrook, including the pipeline tariff, the price for Bakken at the wellhead will be less than the delivered price at Clearbrook.

The strong growth in Bakken production has frequently outpaced expansion of the local transportation infrastructure, leading to discounts for Bakken crude compared to benchmark WTI. Production in North Dakota, the primary source of Bakken crude, rose 243,000 barrels per day (bbl/d), or 58 percent, in 2012 to 663,000 bbl/d, placing North Dakota second only to Texas in oil production among all states. Meanwhile, pipeline capacity out of the region, which is also used to accommodate increased production of Canadian crude flowing through the region, was estimated at only 395,000 bbl/d in 2012.

Limited pipeline capacity has forced shippers of Bakken crude to use alternative transportation, such as railroads. According to the North Dakota Pipeline Authority, loading capacity at North Dakota rail terminals increased by 660,000 bbl/d between 2007 and the end of 2012, with an additional 355,000 bbl/d of capacity expected to come on line by the end of 2014.

Although transportation of crude oil by rail is generally more expensive than shipping by pipeline, rail-loading capacity has proven cheaper and quicker to build. In addition, the logistical flexibility of rail has enabled Bakken crude to reach refining areas not typically served by pipeline from the Bakken. Historically, crude oil production from the Northern Plains has been discounted against midcontinent crudes to account for the added costs of moving these crudes by pipeline to areas such as Cushing, Oklahoma, and the Gulf Coast (PAD District 3).

Investment in rail offloading capacity at East Coast refineries, such as Philadelphia Energy Solutions's Philadelphia complex, suggests that Bakken offers a cost-competitive alternative to Brent-linked crude imports despite the cost of transporting Bakken by rail from the Midwest. The landed cost of Nigerian crude, the leading source of East Coast imports for most of the past two decades, averaged about $117/bbl in 2012, making Bakken and other domestic crudes economical alternatives. Because of the closure of several East Coast refineries and the availability of cheaper domestic light crude, East Coast imports of Nigerian crude fell from 471,000 bbl/d in 2005 to 166,000 bbl/d in 2012.

For West Coast refineries, cost-competitive access to Bakken crude would allow the Bakken oil to displace more-expensive imports there, as well. West Coast imports, which come primarily from Saudi Arabia, Ecuador, and Iraq, have remained flat since 2006; however, Anacortes, Washington, began receiving unit-train shipments of Bakken in late 2012, potentially signaling new competition for West Coast oil imports.

As Bakken rail shipments reach the East and West coasts, pricing for Bakken crude oil is evolving. The ability to economically reach refineries on the East and West coasts expands the market for Bakken beyond the traditional Midwest and Gulf Coast refineries, which have experienced a glut of midcontinent crudes in recent years. By moving east and west, Bakken escapes the infrastructure constraints that have significantly affected the price of WTI. The Gulf Coast, where Brent-linked imports have already declined significantly, offers less opportunity for Bakken. As light-sweet imports continue to be displaced along the Gulf Coast, Bakken will increasingly compete with other domestic crudes, many of which have lower pipeline transportation costs to the Gulf Coast. As long as Bakken production and transportation capacity scramble to seek equilibrium, continued variation in the differential between Bakken and WTI prices is likely.

Gasoline and diesel fuel prices continue to decrease
The U.S. average retail price of regular gasoline decreased four cents from the previous week to $3.65 per gallon as of April 1, 2013, down 30 cents from last year at this time. The U.S. average price has declined 14 cents over the last five weeks. Prices were lower in all regions of the nation except the Rocky Mountains, where the price is $3.50 per gallon, up three cents from last week. The largest decrease came in the Midwest, where the price dropped six cents to $3.60 per gallon. The East and Gulf Coast prices are both lower by three cents, to $3.63 per gallon and $3.48 per gallon, respectively. Rounding out the regions, the West Coast price is $3.95 per gallon, a decline of two cents.

The national average diesel fuel price decreased one cent to $3.99 per gallon, 15 cents lower than last year at this time. The U.S. average price has decreased 17 cents over the last five weeks. Prices decreased in all regions of the nation except the West Coast, where the price increased two cents to $4.12 per gallon. The largest decrease came on the East Coast, where the price declined three cents to $4.03 per gallon. The Gulf Coast price is $3.92 per gallon, a drop of two cents. The Midwest and Rocky Mountain prices are both lower by a penny, to $3.97 per gallon and $3.92 per gallon, respectively.

Propane inventories decline
U.S. propane stocks fell 1.1 million barrels to end at 39.7 million barrels last week, and are 5.0 million barrels (11.3 percent) lower than the same period a year ago. Gulf Coast inventories dropped by 0.6 million barrels, and Midwest regional inventories declined by 0.4 million barrels. East Coast stocks dropped by 0.1 million barrels, while Rocky Mountain/West Coast inventories decreased slightly. Propylene non-fuel-use inventories represented 9.1 percent of total propane inventories.

Text from the previous editions of This Week In Petroleum is accessible through a link at the top right-hand corner of this page.

View the original article here

Mid-Continent Crude Oil Markets Continue to Adjust to Rapid Rise in Bakken Production (4/3/2013)

Released:  April 3, 2013
Next Release:  April 10, 2013

The differential between West Texas Intermediate (WTI) and North Dakota's Bakken crudes continues to fluctuate, reflecting both production growth and changes in oil transportation capacity. Bakken crude sold at a $25-per-barrel discount to WTI in early 2012 and rose to a $5-per-barrel premium last September, before again being discounted below WTI this winter. So far this year, the gap between Bakken and WTI prices has narrowed, and once again, the Bakken price has risen above the WTI price, albeit modestly (Figure 1).

West Texas Intermediate prices are determined at Cushing, Oklahoma; Bakken prices are those at Clearbrook, Minnesota, where the North Dakota pipeline network joins Enbridge's pipeline running southeast from western Canada. Because of the costs of transporting Bakken crude to Clearbrook, including the pipeline tariff, the price for Bakken at the wellhead will be less than the delivered price at Clearbrook.

The strong growth in Bakken production has frequently outpaced expansion of the local transportation infrastructure, leading to discounts for Bakken crude compared to benchmark WTI. Production in North Dakota, the primary source of Bakken crude, rose 243,000 barrels per day (bbl/d), or 58 percent, in 2012 to 663,000 bbl/d, placing North Dakota second only to Texas in oil production among all states. Meanwhile, pipeline capacity out of the region, which is also used to accommodate increased production of Canadian crude flowing through the region, was estimated at only 395,000 bbl/d in 2012.

Limited pipeline capacity has forced shippers of Bakken crude to use alternative transportation, such as railroads. According to the North Dakota Pipeline Authority, loading capacity at North Dakota rail terminals increased by 660,000 bbl/d between 2007 and the end of 2012, with an additional 355,000 bbl/d of capacity expected to come on line by the end of 2014.

Although transportation of crude oil by rail is generally more expensive than shipping by pipeline, rail-loading capacity has proven cheaper and quicker to build. In addition, the logistical flexibility of rail has enabled Bakken crude to reach refining areas not typically served by pipeline from the Bakken. Historically, crude oil production from the Northern Plains has been discounted against midcontinent crudes to account for the added costs of moving these crudes by pipeline to areas such as Cushing, Oklahoma, and the Gulf Coast (PAD District 3).

Investment in rail offloading capacity at East Coast refineries, such as Philadelphia Energy Solutions's Philadelphia complex, suggests that Bakken offers a cost-competitive alternative to Brent-linked crude imports despite the cost of transporting Bakken by rail from the Midwest. The landed cost of Nigerian crude, the leading source of East Coast imports for most of the past two decades, averaged about $117/bbl in 2012, making Bakken and other domestic crudes economical alternatives. Because of the closure of several East Coast refineries and the availability of cheaper domestic light crude, East Coast imports of Nigerian crude fell from 471,000 bbl/d in 2005 to 166,000 bbl/d in 2012.

For West Coast refineries, cost-competitive access to Bakken crude would allow the Bakken oil to displace more-expensive imports there, as well. West Coast imports, which come primarily from Saudi Arabia, Ecuador, and Iraq, have remained flat since 2006; however, Anacortes, Washington, began receiving unit-train shipments of Bakken in late 2012, potentially signaling new competition for West Coast oil imports.

As Bakken rail shipments reach the East and West coasts, pricing for Bakken crude oil is evolving. The ability to economically reach refineries on the East and West coasts expands the market for Bakken beyond the traditional Midwest and Gulf Coast refineries, which have experienced a glut of midcontinent crudes in recent years. By moving east and west, Bakken escapes the infrastructure constraints that have significantly affected the price of WTI. The Gulf Coast, where Brent-linked imports have already declined significantly, offers less opportunity for Bakken. As light-sweet imports continue to be displaced along the Gulf Coast, Bakken will increasingly compete with other domestic crudes, many of which have lower pipeline transportation costs to the Gulf Coast. As long as Bakken production and transportation capacity scramble to seek equilibrium, continued variation in the differential between Bakken and WTI prices is likely.

Gasoline and diesel fuel prices continue to decrease
The U.S. average retail price of regular gasoline decreased four cents from the previous week to $3.65 per gallon as of April 1, 2013, down 30 cents from last year at this time. The U.S. average price has declined 14 cents over the last five weeks. Prices were lower in all regions of the nation except the Rocky Mountains, where the price is $3.50 per gallon, up three cents from last week. The largest decrease came in the Midwest, where the price dropped six cents to $3.60 per gallon. The East and Gulf Coast prices are both lower by three cents, to $3.63 per gallon and $3.48 per gallon, respectively. Rounding out the regions, the West Coast price is $3.95 per gallon, a decline of two cents.

The national average diesel fuel price decreased one cent to $3.99 per gallon, 15 cents lower than last year at this time. The U.S. average price has decreased 17 cents over the last five weeks. Prices decreased in all regions of the nation except the West Coast, where the price increased two cents to $4.12 per gallon. The largest decrease came on the East Coast, where the price declined three cents to $4.03 per gallon. The Gulf Coast price is $3.92 per gallon, a drop of two cents. The Midwest and Rocky Mountain prices are both lower by a penny, to $3.97 per gallon and $3.92 per gallon, respectively.

Propane inventories decline
U.S. propane stocks fell 1.1 million barrels to end at 39.7 million barrels last week, and are 5.0 million barrels (11.3 percent) lower than the same period a year ago. Gulf Coast inventories dropped by 0.6 million barrels, and Midwest regional inventories declined by 0.4 million barrels. East Coast stocks dropped by 0.1 million barrels, while Rocky Mountain/West Coast inventories decreased slightly. Propylene non-fuel-use inventories represented 9.1 percent of total propane inventories.

Text from the previous editions of This Week In Petroleum is accessible through a link at the top right-hand corner of this page.

View the original article here

Rumor: HTC Windows 8 tablet already in production, coming later this year

Rumor: HTC Windows 8 tablet already in production, coming later this year | Windows Phone Central Skip to main content Android BlackBerry iPhone / iPad Windows Phone webOS SIGN UP|LOG IN Windows Phone Central Windows Phone CentralForumsNewsReviewsHelp & How ToDevicesAppsGamesContestsDevelopersEditorials Search Shop online Cases Chargers Batteries Bluetooth & More New accessories FREE Shipping on orders over $50 42 Rumor: HTC Windows 8 tablet already in production, coming later this year Rumors By Sam Sabri, Thursday, Apr 4, 2013 at 7:17 pm

HTC has always been a big partner of Microsoft. They’ve been onboard with Windows Phone since the beginning in 2010, but the history goes back deeper than that. They started out making devices for other companies (running Windows Mobile) and took off when they started to produce devices under their own name. With the upcoming ‘Blue’ update across a variety of Microsoft platforms it’s becoming harder and harder for OEMs to build a Windows Phone and not have a corresponding tablet running Windows 8 to complement it.

NPD DisplaySearch, a market research and consulting firm, believes that HTC is working on a tablet running Windows 8.

Analysts at NDP DisplaySearch propose the suspect a display made by LG at 10.1 inches and with a full HD display (1920 x1080 / 218 pixels per inch). They go onto speculate that the device would be assembled by Pegatron and think production already began in the first quarter.

While we don’t like to speculate on the inner thoughts of an analyst too much, this one was too hard to pass up since a lot of you like HTC and would probably like a tablet from them. What would you want to see in a device from HTC?

It’s totally possible that production has already began on the device. Build is coming up at the end of June in San Francisco and Microsoft typically gives out smartphones and tablets for developers to begin development of applications. That means we might not see a new Surface product till later in the year.

It’s becoming increasingly harder for companies like HTC and Nokia to ignore the tablet space. Both companies have been rumored to have tablets in the pipelines (and some even officially acknowledging their existence).

What do you guys think?

Source: Focus Taiwan; via PocketPC.ch

Thanks for the tip Subserved_Meteor!

Sam Sabri Editor

"Windows Phone. Windows 8. Photography. Halo. "

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Comments There are 42 comments. Sign in to comment fluidh2o says:

I've always liked HTC!

Posted on Apr 4, 2013 at 7:24 pm - 3 days ago Reply KQ17 says:

Me too but they don't like us. Little support.

Posted on Apr 4, 2013 at 7:39 pm - 3 days ago Reply cory.stapleton25 says:

Lol nice comment, that's how I feel sometimes.

Posted on Apr 4, 2013 at 7:53 pm - 3 days ago Reply scdkad says:

I used to think zero support for Titan I but after using 78er to get 8862 there were 5 updates before 8862 so I assume ATT was blocking all of them..

Posted on Apr 4, 2013 at 8:18 pm - 3 days ago Reply Arlensu says:

Totally agree, they also should focus on support existing client, if I can sell my Htc 8X eventhough i love it, i will buy a Nokia! 

Posted on Apr 5, 2013 at 3:48 am - 3 days ago Reply jabtano says:

I agree with you

Posted on Apr 5, 2013 at 5:03 am - 3 days ago Reply Shambels says:

Nokia next? :)

Posted on Apr 4, 2013 at 7:28 pm - 3 days ago Reply cashcar1979 says:

Win8 RT tablets won't take off until MSFT or the major OEMs like Dell, Lenovo, etc get serious about bringing a $299 8" tablet to market. RT simply doesn't sell $399+. I don't think 10" $399 takes off until Bay Trail is ready...

So HTC tab? Meh...

Posted on Apr 4, 2013 at 7:29 pm - 3 days ago Reply Iain_S says:

Im am sure you will start seeing a lot of cheaper rt and pro devices coming out after the blue update.

Posted on Apr 4, 2013 at 8:03 pm - 3 days ago Reply ikissfutebol says:

Still too expensive. Too many legit options for the typical consumption user for $199 and less. Between Kindle Fire, Nook, and Nexus 7, you have to be willing to compete with them. Similar to how the netbook, while crappy and disposable, still drove PC sales and drove the price of other laptops/desktops down as a result. Consumers, particularly during tough economic times, need low cost options. Simply put, trying to sell an WindowsRT tablet at its launch for more than a Kindle Fire of similar size isn't going to make many friends. Less content to currently consume on RT. Hopefully this will change with Blue and the release of Catwalk and Laser with W8/WP8 getting an actual push from carriers.

Posted on Apr 4, 2013 at 11:13 pm - 3 days ago Reply Subserved_Meteor says:

Well, according to the article on PocketPC.ch they're working on a Win8 Tablet and not a WinRT tablet for exactly that reason

Posted on Apr 5, 2013 at 5:20 am - 3 days ago Reply procen says:

If Nokia doesn't make a tablet I will support HTC if they make an 7 or 8 inch tablet and the price will compete with Nexus 7 crap tablet that I have.

Posted on Apr 4, 2013 at 7:32 pm - 3 days ago Reply Blkacesvf41 says:

The Nexus 7 is not crap. I tell you this as someone who really invested in the Microsoft ecosystem. Love my WP and my W8 desktop, but I like to be fair.

Posted on Apr 4, 2013 at 10:04 pm - 3 days ago Reply procen says:

To each to his opinion!

Posted on Apr 4, 2013 at 10:15 pm - 3 days ago Reply theefman says:

Microsoft, Nokia or nothing as these are the only two companies who have shown they will stand behind whatever Windows hardware they produce.

Posted on Apr 4, 2013 at 7:39 pm - 3 days ago Reply Sean D. says:

Oops, true...

Posted on Apr 4, 2013 at 8:52 pm - 3 days ago Reply T Moore says:

That is the way I feel. Nokia gives more and conttinues to support and improve.

Posted on Apr 5, 2013 at 10:25 am - 2 days ago Reply JamesDax3 says:

7in Win8/RT tablet or 5in+ WP8 Phablet.  The company that comes with one or the other first gets my money.

Posted on Apr 4, 2013 at 7:42 pm - 3 days ago Reply Sam Sabri says:

Totally agree. I'm waiting for a 7 to 8 inch device. Hopefully we'll learn more at Build in a few months :)

Posted on Apr 4, 2013 at 7:44 pm - 3 days ago Reply AlexRodriguezNY says:

If its true I won't buy.HTC doesn't give support to Windows devices. I rather wait for Nokia.

Posted on Apr 4, 2013 at 7:52 pm - 3 days ago Reply laserfloyd says:

Would like to see one but I'm a Nokia guy. If Nokia doesn't deliver I'd maybe try HTC out...if the price is right!

Posted on Apr 4, 2013 at 7:54 pm - 3 days ago Reply cory.stapleton25 says:

I would love to see a HTC one like tablet. That aluminum body is pretty nice looking, but....unfortunately it's running Android :'(

Posted on Apr 4, 2013 at 7:56 pm - 3 days ago Reply Microsoftjunkie says:

I'll be buying one to match my 8x.:)

Posted on Apr 4, 2013 at 8:02 pm - 3 days ago Reply Kweezy157 says:

Anybody remember or even heard of the HTC Shift UMPC? It was a touch screen tablet like device that (when stock) ran Windows Vista and a locked down version of Windows Mobile 6.1 (had cellular and all) simutaniously. You could hack it to 6.5.3 and run Windows 7 (and even Win8 I believe) but it had a crap battery I heard. I've always wanted one. It was pretty much like a giant Touch Pro2.

Posted on Apr 4, 2013 at 8:25 pm - 3 days ago Reply Luke Brady says:

I really want a tablet.... But im saving myself for when Nokia get into the tablet game. A Nokia tablet will be amazing.

Posted on Apr 4, 2013 at 8:22 pm - 3 days ago Reply aaa6112 says:

Later this year :)

Posted on Apr 4, 2013 at 10:50 pm - 3 days ago Reply unstoppablekem says:

I thought it would be rt.

Posted on Apr 4, 2013 at 8:55 pm - 3 days ago Reply fluidh2o says:

HTC although struggling, has produced a quality phone in the One. If they could build a tablet version of it in the 7" size with winRT and pitch it to customer-facing businesses I think it would be successful.

Posted on Apr 4, 2013 at 9:37 pm - 3 days ago Reply Lych says:

Aside from acknowledging it, did we get any more info on Nokia's tablet? I'd love it of either HTC or Nokia released a W8 tablet. I might even be able to actually buy one, which is already more than what I can say about the surface. Not even an RT, for crying out loud...

Posted on Apr 4, 2013 at 9:40 pm - 3 days ago Reply bulls2213 says:

It exists, but no word on if / when it will be released to the masses...

Posted on Apr 5, 2013 at 8:40 am - 2 days ago Reply kevinn206 says:

Hmm 1080p would imply a non-Atom tablet.

Posted on Apr 4, 2013 at 9:52 pm - 3 days ago Reply rcciren says:

There's a new "Bay Trail" Atom coming out that has an implementation of HD4000. What you get is a GPU that can decode a 1080p stream at 60 frames per second while using just five percent of the CPU's power. It'll be available as a SoC with 1, 2 or 4 cores. There's a "T" variant targeted at tablets.

Posted on Apr 5, 2013 at 12:30 am - 3 days ago Reply Terantek says:

I'm not sure if even Bay Trail will have enough graphical power to run apps at 1080p (especially 2 apps side by side at half 1080p), and I can't see them making a tablet like the surface pro because that is not really a big market, nor is it HTC's normal market. HTC won't want to be selling it for any more than $400 at a stretch to get sales. I think this will need to be ARM for HTC to deliver a 1080p device with decent battery life in a 10.1" frame that hopefully won't weigh too much and is cheap to produce. This year's crop of ARM chips are more than capable of achieving this, they have several times more graphical power than devices like the surface.

Posted on Apr 5, 2013 at 4:45 am - 3 days ago Reply the92playboy says:

I loved HTC prior to Windows Phone 8. I had a mogul, then it's sucessor; loved them and their WinMo. Had a HD7 and loved it too. All these devices had great build quality and ruggedness. Then the 8x, which broke after being dropped. Wasn't used to that.

I would buy an HTC W8 tablet in a heartbeat, provided it is considerably less than the surface. I love my surface pro, but cannot justify the price for getting one for my wife, who is a casual user.

Posted on Apr 4, 2013 at 11:14 pm - 3 days ago Reply stephen_az says:

....and yet another bit of BS misrepresentation about Blue slipped into an alleged news story. Once again, Blue is a series of updates across platforms with only idle speculation claiming any deeper meaning. It is not a unifying update across platforms - just a common schedule for platform updates. Actually even that is specilative since there have been no substantive announcements. Blue does not in any way make it harder to ignore tablets when building Windows Phones since there is 1) no proof it unifies anything, and 2) HTC is hardly making a big push with Windows Phone. It only takes a few minutes to check one's logic but I guess those are a few minutes too many. How about just once presenting only the facts or leaks, without the added layer of ill informed misinformation about other things?

Posted on Apr 5, 2013 at 1:30 am - 3 days ago Reply Nakazul says:

This will not go well for HTC, there already in financial troubles as it is.

Posted on Apr 5, 2013 at 3:26 am - 3 days ago Reply Chef316 says:

Would be awesome if it was a WP8 Phablet...I'd go for that over a W8 RT Tablet!!!!

Posted on Apr 5, 2013 at 3:29 am - 3 days ago Reply Abdul Rahman Noor says:

If you ask me HTC needs to focus on doing what works for them - which at the moment is android.
Yes, the 8x and 8s are good phones, but their pathetic support for these devices show they're not really a priority for them right now.
Why make a tablet and diversify even more an already muddled strategy?

Posted on Apr 5, 2013 at 4:02 am - 3 days ago Reply gd761 says:

What I Would Like to See with a Windows 8 Tablet from HTC is that HTC build a Windows 8 Pro Tablet that's 10" or better with 1080P, a Quad Core 2.5GHZ CPU, a 1.5GB Video Chip, accessible Ram that can be Upgraded as well as the SSD, a Micro SDXC Card slot, 2 USB 3.0 connectors, 1 Mini HDMI out port, Bluetooth 4.0, WiFi AC or higher, raised edges just like their previous tablest to protect the screen if it's turned over, True World LTE Connectivity, video playback of about 12 hours, 1080P Video Recording from Rear Camera, Split Screen capability for Skype to be able to show both Front and Rear Cameras to the other person, the Same Quality of Sound that the HTC Jetstream has also with the Subwoofer included, GPS, and a Kickstand sort of like what the Microsoft Surfact Tablet has, but an adjustable Kickstand to be able to change the Viewing angles.

Posted on Apr 5, 2013 at 5:52 am - 3 days ago Reply gerzhwin says:

I am totally pleased with my 8X, which came shipped yesterday. Hopefully HTC will and can make a suitable tablet device, and please: 10 inch plus with 1080 resolution! My phone screen has 4.3 inches, so I don’t need a small 7-inch tablet …

Posted on Apr 5, 2013 at 6:46 am - 3 days ago Reply IceDree says:

Interesting, if HTC made a Hi-Res 10"~12" tablet with 3G\4G , Minimum of 32GB of storage (SD slot would be awesome) , Aluminum body & build quality that can match the iPad & Motorola Xoom ! I'll be really tempted to get one to replace my Xoom !
But if it turned out of be a 7"~8" I'll pass ...

Posted on Apr 5, 2013 at 7:26 am - 3 days ago Reply ihavewp8 says:

Can't wait get it

Posted on Apr 5, 2013 at 8:50 pm - 2 days ago Reply */Tip Us On News!

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CrackBerry, iMore, webOS Nation, and WPCentral   Monday Brief: Facebook Home, iOS 7, and a major webOS contestEndless Robot Street, a smash 'em up kinda gameThe drunken attempt to destroy a Nokia Lumia 920Flickr app Pixl for Windows Phone gains 8 filtersRumor: Google attempting to acquire WhatsApp for near $1 billion   Sony Xperia Z may be headed to T-Mobile USASkala View comes to Android, helps designers make better looking appsHTC unaudited Q1 results see profits slip to just $2.83 millionBootloaders have been unlocked on the Droid RAZR HD, Atrix HD, RAZR MFrom the Editor's Desk: A few answers from (and more questions for) FacebookNew Google Play Store app sighted on Google+ Vote for the BlackBerry Z10 to win in the Smartphone Madness 2013 Finals!SayIt for BlackBerry 10 updated to version 2.0No Rdio app for BlackBerry 10 yet? Try forte.fmHow to access the engineering (Help Me!) screen on BlackBerry 10The iMore Podcast where CrackBerry Kevin and Windows Phone Dan talk about how stupid this Smartphone Madness contest is... WWF Together for iPad reviewMake the perfect Old Fashioned with Mad Men Cocktail Culture for iPhoneiMore show 344: Not live from New YorkThis week's iMore show (ironically) not live from New YorkEditor's desk: Big Apple AppleFacebook's not-a-phone gets not-a-commercial Coming soon: The Great webOS Nation GiveawaySet an AlarmTurn your phone into a Star Trek communicatorSwitching to Android? It'll probably feel familiarAnswer a phone callMonday Brief: BlackBerry Q4 earnings, a Google Watch, and the last Monday Brief ever!   Windows Phone ForumsAndroid ForumsBlackBerry ForumsiPhone / iPad ForumswebOS Forums Copyright 2013 Mobile Nations ? Terms and Conditions ? Privacy Policy (function(d, s, id) { var js, fjs = d.getElementsByTagName(s)[0]; if (d.getElementById(id)) {return;} js = d.createElement(s); js.id = id; js.src = "//connect.facebook.net/en_US/all.js#xfbml=1&appId=161262480631740"; fjs.parentNode.insertBefore(js, fjs);}(document, 'script', 'facebook-jssdk'));

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