Published:
Friday, 30 Dec 2011 | 1:50 PM ET
By: Patti Domm
CNBC Executive News Editor
While U.S. drivers continue to cut back at the pump, refiners are increasingly sending more gasoline and diesel fuel overseas, making the U.S. a net exporter of refined products for the first time in more than a half century.
 |
Mark Lennihan / AP
|
The EIA Thursday reported that U.S. crude demand was down 2.2 percent in October, from a year ago.
Andrew
Lipow, president of Lipow Oil Associates, said the EIA October data
revealed other important trends. One is that there was another big drop
in consumer gasoline demand, even as prices at the pump came off the
summer highs. The other is that the U.S. increasingly exporting refined
products, led by distillates.
Unlike
gasoline, distillates demand is in fact rising domestically and the
refining industry is producing record amounts, he said. Distillates
include diesel fuel, jet fuel and home heating oil.
“Gasoline
demand is down 4.4 percent for October of this year versus last year,
and conversely they are showing distillate demand is up 4.5 percent,”
Lipow said. Distillate demand is rising in large part because of the use
of diesel fuels by the transportation industry.
Lipow
said the numbers show that the U.S. exported 1.07 million barrels a day
of distillates, which includes diesel fuel, double the 557,000 barrels
two years ago and up from last year’s 870,000 barrels.
Gasoline
exports have also grown to the point where they are getting close to
equaling the amount of imports. The number of exports totaled 562,000
barrels a day, compared to imports of 596,000.
For
all refined petroleum products, the U.S. in the first 10 months of 2011
exported 848 million barrels and imported 750 million. Lipow said he
believes this if the first time since World War II that the U.S. will be
a net exporter of refined petroleum products, but government data on
the EIA website only goes back to 1973.
Even with its ability to export, the U.S. refining industry is not operating at peak capacity. It is currently running at a rate of 84.7 percent, but the picture for the industry could also change in coming months as the east coast continues to see refineries shut down. Two big closures are pending in the Mid-Atlantic for 2012.
“One
reason the U.S. is exporting more gasoline is that ethanol has
contributed more fuel supply so refineries have a surplus of gasoline
made strictly from crude oil,” Lipow said.
Some of the reduction in gasoline demand could be coming from conservation and more efficient engines.
Interestingly,
the U.S. in October exported nearly 10 percent, or 93,000 barrels a day
of its ethanol, which was being produced at a near-record level of
906,000 barrels a day. One country receiving some of those imports was
Brazil, a leading producer and consumer of ethanol.
Kilduff
said the drop in consumer gasoline consumption is a longer term trend
but the continued decline is worrisome and reflects a weak economy.
“Even (the weekly report) which should have captured the holiday driving
season was showing 8.6 million barrels (gasoline consumed), which is
low for this time of year,” he said.
Lipow
said he does not anticipate gasoline prices will keep dropping, but he
said the price at the pump may be more directly influenced by the price
of crude oil in the coming year.
“They’ve
(refiners) satisfied demand and exported the balance. It’s all going to
depend on the crude price because in 2012, you have declining demand
and adequate refined supply,” he said.
“Especially
in 2012 to watch, you can imagine that the exports of distillates is
going to be a political issue. We’re even exporting ethanol fuels,” he
said.
Gasoline
prices currently average $3.26 a gallon nationally, according to AAA. In
July, regular unleaded gasoline hit an average high of $4.114 and was
at $3.071 at this time last year.
Diesel
fuel hit a high of $4.845 this summer and is now averaging $3.824 —
well above the price at this time last year of $3.315 per gallon.
No comments:
Post a Comment