Supplies of winter fuel said to be adequate -
Wednesday, October 6, 2004 4:35:16 PM
afxpress.com
WASHINGTON (AFX) -- National and regional stockpiles of heating fuels are at adequate levels heading into the winter season, according to a report released Wednesday by the Energy Information Administration, the statistical arm of the U.S. Department of Energy. These inventories are vital in helping to curb price spikes caused by unanticipated severe weather and resulting surges in demand. Working gas in storage in the lower 48 states stands at 3.065 trillion cubic feet, roughly 222 billion cubic feet higher than last winter's levels, the winter fuel outlook report said. By Oct. 31 gas inventories are expected to be at their highest levels since 1990, the report said. Nevertheless, consumer heating costs for winter were projected to rise about 15 percent. Withdrawals of natural gas from storage are expected to average 9.9 billion cubic feet per day, slightly more than the 9.8 billion cubic feet daily withdrawal rate last winter. Demand for natural gas is expected to climb 2.2 percent to 70.5 billion cubic feet per day, a rise of 1.5 percent over the previous winter. This increase in demand is partly a result of continued demand increase in the commercial and power-generation sectors, the report said. The U.S. will need to import 9.6 billion cubic feet of natural gas per day to meet demand, a slight increase from last winter. The bulk of these imports will come from Canada via pipelines
Domestic dry natural gas production this winter is projected to average 52.3 billion cubic feet per day, an increase of less than 1 percent over the previous year's production level. Estimated production levels are slightly lower due to the impact of Hurricane Ivan on drilling in the Gulf of Mexico, the report said. The U.S. Minerals Management Service has reported that Hurricane Ivan curbed production of crude oil by more than 14.8 million barrels and natural gas by 66.1 billion cubic feet. Natural gas wellhead prices are expected to average $6.04 per million cubic feet, up 23 percent over last winter. The production losses in the Gulf of Mexico are a factor in this increase, the report said. Distillate fuel inventories in the lower 48 states, excluding 2 million barrels tucked away in the Northeast heating oil reserve, were holding 126.4 million barrels of heating oil at the end of September. This level is slightly lower than the 131.3 million barrels in storage at the same time last year but still within the "normal range." In the Northeast, the largest market for heating oil, inventories have reached 39.7 million barrels, slightly less than the 42.6 million barrels held last winter
Demand for distillate fuel is expected to rise 3.7 percent to 4.2 million barrels per day this winter
To meet demand, refineries are expected to increase their output this winter to 3.8 million barrels per day up from roughly 3.7 million barrels per day last winter. Demand for propane will rise less than 1 percent to 1.49 million barrels per day due to continued economic growth, a larger corn crop than the previous year and projected colder-than-average weather this winter. Propane stockpiles in the lower 48 states are holding 68.8 million barrels of fuel, a 10 percent increase over levels last winter |
