Recent Fuel Price Trends & Market Developments Petroleum Market Advisory Committee Meeting California Energy Commission Sacramento, California December.

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Presentation transcript:

Recent Fuel Price Trends & Market Developments Petroleum Market Advisory Committee Meeting California Energy Commission Sacramento, California December 16, 2015 Gordon Schremp Energy Assessments Division California Energy Commission California Energy Commission

CA retail gasoline prices are slowly dropping California – Down 15.4 cpg since last month and down 3.5 cpg since last week – 22.1 cpg lower than same time last year Washington – Down 10.3 cpg since last month and down 2.0 cpg since last week – 42.5 cpg lower than same time last year 12/16/20152 Washington Average Prices California Average Prices National Average Prices Snapshot - Retail Prices Declining in CA

California Energy Commission 12/16/20153

California Energy Commission 12/16/20154

California Energy Commission 12/16/20155

California Energy Commission California Retail Gasoline Components 12/16/20156

California Energy Commission Refinery Operations 12/16/20157 Refinery problems – gasoline impact quantified West coast gasoline production capability significantly degraded Based on analysis of IIR data, the quantity of gasoline production capacity off-line during April – November averaged nearly 148 thousand barrels per day (TBD) greater than 2014 o October – 190 TBD more, November 230 TBD more and December (Y-T-D) 215 TBD more than previous year Source: Industrial Information Resources (IIR) Loss Gasoline Production Report.

California Energy Commission Refinery Operations – Look Ahead 12/16/20158 Other refinery issues: ExxonMobil – Torrance refinery will not resume operation of gasoline production equipment until 1Q 2016 – Sale to PBF announced West Coast planned maintenance activity heavier-than-normal through late December – mainly impacting gasoline production Source: Industrial Information Resources (IIR) Refinery Off-line Report.

California Energy Commission 12/16/20159 Source: California Energy Commission analysis of Petroleum Industry Information Reporting Act data. California Gasoline Production Current vs. 5-year High-Low Band Data through November 27, 2015

California Energy Commission 12/16/ Source: California Energy Commission analysis of Petroleum Industry Information Reporting Act data. Southern Calif. Gasoline Production Current vs. 5-year High-Low Band Data through November 27, 2015 Extended period of lower-than-normal output due to ExxonMobil idle gasoline production equipment.

California Energy Commission 12/16/ Source: California Energy Commission analysis of Petroleum Industry Information Reporting Act data. Northern Calif. Gasoline Production Current vs. 5-year High-Low Band Data through November 27, 2015

California Energy Commission 12/16/ Source: California Energy Commission analysis of Petroleum Industry Information Reporting Act data. California Gasoline Inventory Levels Current vs. 5-year High-Low Band California gasoline inventories have recovered to normal range aided by marine imports. Data through November 27, 2015

California Energy Commission 12/16/ Source: California Energy Commission analysis of Petroleum Industry Information Reporting Act data. Southern Calif. Gasoline Inventory Current vs. 5-year High-Low Band Data through November 27, 2015 Extended period of lower-than-normal inventory due to ExxonMobil idle gasoline production equipment.

California Energy Commission 12/16/ Source: California Energy Commission analysis of Petroleum Industry Information Reporting Act data. Northern Calif. Gasoline Inventory Current vs. 5-year High-Low Band Data through November 27, 2015

California Energy Commission 12/16/ West Coast Foreign Gasoline Imports

California Energy Commission 12/16/ California Foreign Gasoline Exports 2015 exports have averaged 22.0 TBD vs TBD during percent of shipments originated from Northern California during 2015.

California Energy Commission 12/16/ Pacific Northwest Foreign Gasoline Exports 2015 exports have averaged 16.5 TBD vs TBD during 2014.

California Energy Commission Fuels-Under-the-Cap (FUTC) Tracking 12/16/ Fuels-Under-the-Cap regulation went into effect January 1, 2015 The Oil Price Information Service (OPIS) calculates a value for the FUTC obligation each business day, California Cap-at-the-Rack (CAR) Assessment valuation uses price of carbon x carbon intensity of the transportation fuel Winter CARB reformulated gasoline with 10 percent ethanol Summer CARB reformulated gasoline with 10 percent ethanol CARB diesel fuel Majority of fuel providers have elected to use the daily OPIS CAR calculation for inclusion in their bills of lading at the distribution terminal Either as a line item or embedded in the price Some marketers are calculating their own FUTC assessment and including in the overall price of the fuel

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California Energy Commission 12/16/201520

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California Energy Commission Retail Fuel Price Tracking Observations 12/16/ Gasoline From December 31, 2014 to December 15, 2015 the gap between the California retail gasoline price and other Western states has ranged between an increase of 1.5 to 23.6 cents per gallon The calculated FUTC assessment by OPIS has averaged 10.2 cents per gallon over the same period and lies within the range of retail price differential change Even greater differentials are attributed to increased tightness in the California gasoline market caused by refinery issues - crude oil prices have also rebounded and stabilized but are not a contributing factor to the retail price differential Diesel Fuel From December 31, 2014 to December 15, 2015 the gap between the California retail diesel fuel price and other Western states has ranged between a decrease of 1.3 and an increase of 18.9 cents per gallon The calculated FUTC assessment by OPIS has averaged 13.0 cents per gallon over the same period and lies within the range of retail price differential change

Questions? California Energy Commission 12/16/ Source: Michael Zwahlen, Sacramento Press

Additional Charts California Energy Commission 12/16/201525

California Energy Commission 12/16/201526