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Update: A Year of Volatility Oil Markets and Gasoline

Update: A Year of Volatility Oil Markets and Gasoline. June 20, 2000 Energy Information Administration. Retail Product Prices Driven by Crude. $34/Barrel. $11/Barrel. Gasoline Prices in Inflation-Adjusted Terms.

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Update: A Year of Volatility Oil Markets and Gasoline

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  1. Update: A Year of VolatilityOil Markets and Gasoline June 20, 2000 Energy Information Administration

  2. Retail Product Prices Driven by Crude $34/Barrel $11/Barrel

  3. Gasoline Prices in Inflation-Adjusted Terms Source: BLS Regular Gasoline, EIA Refiners Acquisition Price for Imported Crude Oil

  4. Crude Oil Prices High But May Relax Some By Year’s End West Texas Intermediate Sources: History: EIA; Projections: Short-Term Energy Outlook, June 2000.

  5. EIA OPEC Production Assumption Projects Increasing Leakage Sources: History: EIA; Projections: Short-Term Energy Outlook, June 2000.

  6. Supply/Demand Forecasts Leave Little Room for Winter Drawdown

  7. Price Volatility Will Remain Until Inventories Rebuild

  8. Low Stocks Mean Tight Markets

  9. Tight Markets Lead to High Gasoline Spreads

  10. MidWest RFG Price Rose Quickly

  11. Midwest RFG Production Somewhat Low

  12. Midwest Conventional Stocks Very Low; RFG Not As Extreme

  13. Regional Inventories Low

  14. Midwest RFG Is Small Fraction Of Market & Is “Unique” Blend East Coast Midwest EIA Prime Supplier Data 1999 For Period After MO Entered the Program

  15. While Gasoline Has the Limelight, Distillate Is Being Watched

  16. Natural Gas Supply Concerns Driving Up Prices

  17. Conclusion: Volatile Prices Likely in the Year Ahead • Gasoline markets: Low stocks, high prices, volatility • Winter heating fuel: May have low inventories going into winter, resulting in price volatility • Natural gas: High prices and supply concerns may impact distillate stock build for winter and can mean high natural gas prices this winter • But maybe OPEC will add more supply, stocks will build, and prices will fall

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