This Week In Petroleum July 29, 2015
EIA reports show different aspects of U.S. oil production statistics and trends
As crude oil prices and rig counts have fallen significantly since late 2014, changes in U.S. crude oil production statistics and trends have come into focus. EIA publishes several reports covering current crude oil production conditions and how recent trends may affect the near-term outlook for the oil industry (Figure 1). Each EIA product is distinct in its purpose, methodology, timeframe, and regional coverage. Some reports are estimates of actual production volumes, while others focus on future production.
The Petroleum Supply Monthly (PSM) reports estimates of crude oil and petroleum products production, imports and exports, movements, and inventories on a national and regional level, lagged by two months. PSM estimates of crude oil production rely on several sources, including data from state and federal agencies, the EIA-182 survey of crude oil purchase volumes, and data from state agencies organized for EIA by a commercial data vendor. A recent Today in Energy article focused on EIA's approach to developing the PSM production estimates for Texas and their relationship to Texas data from the Texas Railroad Commission.
The Weekly Petroleum Status Report (WPSR) is a compilation of data for reporting the previous week's U.S. crude oil balance and supply of petroleum products. The WPSR's closely followed U.S. crude oil balance includes independently developed components that relate to estimates of U.S. crude oil production, imports, refinery runs, exports, and stock changes. WPSR relies on a number of sources, including EIA surveys and data from other federal agencies, and a crude oil adjustment figure that captures the uncertainty associated with each of the supply and disposition components. Unlike other reports or products, WPSR data are not re-estimated retroactively; they are a snapshot in time of the best available information for a given week.
The Drilling Productivity Report (DPR) provides a month-ahead projection of oil production for seven of the more significant U.S. tight oil and shale gas formations. DPR analyzes these formations as regions containing all of the counties with some portion of each tight oil formation as well as conventional resources. To derive a projection for each region, the DPR methodology uses recent data on the total number of drilling rigs, estimated per-rig drilling productivity, and changes in production from existing oil wells. Because tight and conventional oil production sourced in the DPR regions is only a subset of total U.S. crude oil production, aggregated values from the DPR will be less than those in the PSM or WPSR.
The Short Term Energy Outlook (STEO) provides onshore production forecasts based on current and projected rig counts, rig and well productivity trends, and decline rates of legacy production. Unlike the DPR, STEO's also incorporates a short-term oil price path used to project rig activity and production volumes 13-24 months into the future. STEO also includes projections for the federal offshore Gulf of Mexico and Alaska, using historical data, information about upcoming projects, and seasonal factors such as hurricane-related outages.
These production estimates are connected in several ways. PSM estimates are used as one input to the WPSR's weekly estimate of U.S. crude oil production. The STEO forecasts are benchmarked to the latest monthly oil production estimates from the PSM. In addition, the onshore portion of STEO's forecast is informed by the DPR, whose seven regions currently account for more than 70% of total U.S. onshore production.
U.S. average retail gasoline and diesel fuel prices decrease
The U.S. average retail price of regular gasoline was $2.75 per gallon as of July 27, 2015, down six cents from the previous week and 79 cents lower than the same time last year. The Rocky Mountain price was the only increase, up two cents to $2.86 per gallon. The Midwest price declined nine cents to $2.58 per gallon, followed by the West Coast price, which fell six cents to $3.55 per gallon. The Gulf Coast price was down five cents to $2.44 per gallon and the East Coast price was four cents lower at $2.63 per gallon.
The U.S. average price for diesel fuel decreased six cents from the previous week to $2.72 per gallon, $1.14 per gallon lower than the same time last year. The East Coast, Midwest, and Gulf Coast prices each decreased six cents to $2.81 per gallon, $2.62 per gallon, and $2.61 per gallon, respectively. The West Coast price was down five cents to $2.96 per gallon. The Rocky Mountain price declined four cents to $2.74 per gallon.
Propane inventories gain
U.S. propane stocks increased by 1.8 million barrels last week to 89.4 million barrels as of July 24, 2015, 22.2 million barrels (33.1%) higher than a year ago. Gulf Coast inventories increased by 1.2 million barrels while East Coast and Midwest inventories both increased by 0.2 million barrels. Rocky Mountain/West Coast inventories increased by 0.1 million barrels. Propylene non-fuel-use inventories represented 5.6% of total propane inventories.