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EIA SEES NO U.S. FUEL SUPPLY PROBLEMS THIS WINTER

Oct. 26, 1992

The U.S. Energy Information Administration sees no problems with U.S. fuel supplies this winter. Although much of the nation's midsection could face colder than normal temperatures this winter, EIA said petroleum stocks and refinery capacity are adequate. Refinery capacity increased by 300,000 b/d this year to 15.5 million b/d. Refinery utilization has fallen to 89.7% from 91.3% a year ago. EIA said crude stocks were lower on Oct. 2 than the same time a year ago, failing to 327.6 million

The U.S. Energy Information Administration sees no problems with U.S. fuel supplies this winter.

Although much of the nation's midsection could face colder than normal temperatures this winter, EIA said petroleum stocks and refinery capacity are adequate.

REFINERY CAPACITY, STOCK CHANGES

Refinery capacity increased by 300,000 b/d this year to 15.5 million b/d. Refinery utilization has fallen to 89.7% from 91.3% a year ago.

EIA said crude stocks were lower on Oct. 2 than the same time a year ago, failing to 327.6 million bbl from 340.6 million bbl.

In addition, distillate stocks fell to 132 million bbl from 140.1 million bbl in a comparison of the same periods.

EIA said, "Even in the worst of situations, we don't think there will be a supply problem with distillates."

The agency estimated distillate demand this winter at 3.38 million b/d, the highest level since the winter of 1979-80. It forecast retail prices at $1.03/gal for heating oil and $1.19/gal for diesel oil.

PROPANE NOT A CONCERN

Propane stocks, which have been a problem in recent years, were at 62.2 million bbl Sept. 30 compared with 51.6 million bbl the same time a year ago.

Calvin Kent, EIA administrator, said, "Propane stocks are now as high as they have ever been at this time of the year. We just don't see a problem except in a very cold snap, as we saw in 1989."

Kent said refining and natural gas processing operations are yielding more propane than in previous years.

GAS BUBBLE GONE?

Kent also said U.S. natural gas storage is 5-7% below normal, the gas bubble has ended, and "Prices are going to be higher, ranging $1.88-2.26/Mcf."

He predicts U.S. natural gas demand will increase 4%, or 2.6 bcfd but contends deliverability will be adequate at 77 bcfd.

Kent also said that even if problems arise in an extreme cold spell, they would not be as bad as they were in December 1989.

John Lichtblau, president of the Petroleum Industry Research Foundation, predicted an uneventful winter for oil prices worldwide, with average prices about $1/bbl lower than a year ago.

He foresees no heating oil supply problems, contending that "U.S. refiners have more flexibility to make distillate, due to low gasoline demand."