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 [email protected]California Energy Commission
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Recent Fuel Price Trends & Market Developments Petroleum Market Advisory Committee Meeting California Energy Commission Sacramento, California December.
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Recent Fuel Price Trends & Market Developments
Petroleum Market Advisory Committee MeetingCalifornia Energy Commission
Retail Gasoline Price DifferencesCalif. Less U.S. Reformulated Average
Sources: California Energy Commission analysis of Energy Information Administration data.
Reformulated gasoline
Y-T-D data through December 14, 2015
California Energy Commission12/16/2015 4
262.8264.8
150.9
177.5
83.5
50
100
150
200
250
300
350
400
45012
/31/
2014
1/14
/201
5
1/28
/201
5
2/11
/201
5
2/25
/201
5
3/11
/201
5
3/25
/201
5
4/8/
2015
4/22
/201
5
5/6/
2015
5/20
/201
5
6/3/
2015
6/17
/201
5
7/1/
2015
7/15
/201
5
7/29
/201
5
8/12
/201
5
8/26
/201
5
9/9/
2015
9/23
/201
5
10/7
/201
5
10/2
1/20
15
11/4
/201
5
11/1
8/20
15
12/2
/201
5
Cent
s Pe
r Gal
lon
California Gasoline Price ChangesRetail, Rack and Refinery Wholesale
California Regular Grade Retail GasolineRefinery Wholesale - CA AverageRack Wholesale - Los AngelesCrude Oil
Source: CEC analysis of AAA and OPIS prices.
Refinery wholesale peaked July 10Rack wholesale peaked July 13Retail peaked July 16
California Energy Commission12/16/2015 5
129.2 129.0 120.6 121.3146.9 145.0
115.684.9
32.362.4
117.889.2
134.7
100.1
79.9
88.3
10.2
10.0
10.0
10.1
10.2
10.3
10.3
36.0
30.0
30.0
44.2
16.0
31.5
42.5
24.5
26.0
28.8
25.0
268.0280.2
343.9
326.7
381.0
345.3
291.4
264.8
0
50
100
150
200
250
300
350
400
450
12/2
9/14
2/17
/15
3/9/
15
3/23
/15
5/14
/15
6/27
/15
10/1
2/15
12/1
5/15
Cent
s Pe
r Gal
lon
Distribution, Dealer Costs & Profits
Federal Excise Tax
State Excise Tax
Fuels Under the Cap Obligation
State & Local Taxes
UST Fee
Refiner Costs & Profits
Crude Oil Cost
Retail Price
Sources: California Energy Commission analysis of OPIS, EIA, and AAA data.
California Energy Commission
California Retail Gasoline Components
12/16/2015 6
California Energy Commission
Refinery Operations
12/16/2015 7
• 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 2014o 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
12/16/2015 8
• 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 Commission12/16/2015 9
Source: California Energy Commission analysis of Petroleum Industry Information Reporting Act data.
California Gasoline ProductionCurrent vs. 5-year High-Low Band
Data through November 27, 2015
California Energy Commission12/16/2015 10
Source: California Energy Commission analysis of Petroleum Industry Information Reporting Act data.
Southern Calif. Gasoline ProductionCurrent 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 Commission12/16/2015 11
Source: California Energy Commission analysis of Petroleum Industry Information Reporting Act data.
Northern Calif. Gasoline ProductionCurrent vs. 5-year High-Low Band
Data through November 27, 2015
California Energy Commission12/16/2015 12
Source: California Energy Commission analysis of Petroleum Industry Information Reporting Act data.
California Gasoline Inventory LevelsCurrent 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 Commission12/16/2015 13
Source: California Energy Commission analysis of Petroleum Industry Information Reporting Act data.
Southern Calif. Gasoline InventoryCurrent 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 Commission12/16/2015 14
Source: California Energy Commission analysis of Petroleum Industry Information Reporting Act data.
Northern Calif. Gasoline InventoryCurrent vs. 5-year High-Low Band
Data through November 27, 2015
0
20
40
60
80
100
120
140
160
180
200
2/27 3/
63/
133/
203/
27 4/3
4/10
4/17
4/24 5/
15/
85/
155/
225/
29 6/5
6/12
6/19
6/26
7/03
7/10
7/17
7/24
7/31 8/
78/
148/
218/
28 9/4
9/11
9/18
9/25
10/2
10/9
10/1
610
/23
10/3
011
/611
/13
11/2
011
/27
12/4
Thou
sand
s of B
arre
ls P
er D
ay 2015 Total Gasoline Imports
2014 Total Gasoline Imports
Source: California Energy Commission analysis of weekly import data from the Energy Information Administration.
3/27-12/4/15 averaged 61.9 thous. barrels per day (TBD)18.3 TBD same period during 2014Highest quantity since 2007
California Energy Commission12/16/2015 15
West Coast Foreign Gasoline Imports
33.7
6.3
9.8
30.2
60.4
26.123.6
29.8
21.7
36.938.5
21.223.3
14.812.9
33.3
0.3
18.5
0
10
20
30
40
50
60
70
January February March April May June July August September
Thou
sand
s of B
arre
ls P
er D
ay
2014 2015
Source: California Energy Commission analysis of the International Trade Commission's Interactive Tariff and Trade DataWeb.
California Energy Commission12/16/2015 16
California Foreign Gasoline Exports
2015 exports have averaged 22.0 TBD vs. 27.1 TBD during 2014.
98.6 percent of shipments originated from Northern California during 2015.
50.4
36.9
27.7
4.0
21.0
7.3
22.8
9.6
26.5
16.6
13.415.4
16.5 16.1 16.9
13.0
27.2
13.3
0
10
20
30
40
50
60
January February March April May June July August September
Thou
sand
s of B
arre
ls P
er D
ay 2014 2015
Source: California Energy Commission analysis of the International Trade Commission's Interactive Tariff and Trade DataWeb.
California Energy Commission12/16/2015 17
Pacific Northwest Foreign Gasoline Exports
2015 exports have averaged 16.5 TBD vs. 22.9 TBD during 2014.
California Energy Commission
Fuels-Under-the-Cap (FUTC) Tracking
12/16/2015 18
• 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
• 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
38.3
63.5
10.8
23.0
12.4
36.0
14.916.4
46.3
65.4
0
20
40
60
80
100
120
14012
/30/
2014
1/13
/201
5
1/27
/201
5
2/10
/201
5
2/24
/201
5
3/10
/201
5
3/24
/201
5
4/7/
2015
4/21
/201
5
5/5/
2015
5/19
/201
5
6/2/
2015
6/16
/201
5
6/30
/201
5
7/14
/201
5
7/28
/201
5
8/11
/201
5
8/25
/201
5
9/8/
2015
9/22
/201
5
10/6
/201
5
10/2
0/20
15
11/3
/201
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11/1
7/20
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12/1
/201
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12/1
5/20
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Cent
s Pe
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Retail Gasoline Price DifferencesCalifornia vs. United States and Selected States
California Less United States California Less WashingtonCalifornia Less Oregon California Less NevadaCalifornia Less Arizona
Source: CEC analysis of AAA prices.
California retail gasoline price premium to U.S. has increased 25.2 cpg between 12/31/14 and 12/15/15.Premium to WA has increased 12.2 cpg.Premium to OR has increased 23.6 cpg.Premium to NV has increased 1.5 cpg.Premium to AZ has increased 19.1 cpg.
OPIS FUTC assessment for gasoline has averaged 10.2 cpg thru 12/15/15.
California Energy Commission12/16/2015 19
-8.3
27.4
-9.0
25.6
-11.0
30.0
-40
-20
0
20
40
60
80
100
120
14012
/30/
2014
1/13
/201
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1/27
/201
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2/10
/201
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2/24
/201
5
3/10
/201
5
3/24
/201
5
4/7/
2015
4/21
/201
5
5/5/
2015
5/19
/201
5
6/2/
2015
6/16
/201
5
6/30
/201
5
7/14
/201
5
7/28
/201
5
8/11
/201
5
8/25
/201
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9/8/
2015
9/22
/201
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10/6
/201
5
10/2
0/20
15
11/3
/201
5
11/1
7/20
15
12/1
/201
5
12/1
5/20
15
Cent
s Pe
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Gasoline Refinery Spot Price BasisCalifornia vs. Pacific Northwest
California CARBOB Los Angeles BasisCalifornia CARBOB Bay Area BasisPNW Sub-octane Basis
Source: Oil Price Information Service
California average refinery spot price premium to NYMEX gasoline contract has averaged 30.6 cpg between 2/18/15 and 12/15/15. During the same period in 2014 the premium averaged 5.3 cpg.
Refinery wholesale gasoline prices continue strong premium rebound due to unusually significant refinery issues during November
California Energy Commission12/16/2015 20
8.3
35.5
3.1
8.8
17.925.2
10.9 9.617.7
36.6
-20
-10
0
10
20
30
40
50
60
7012
/30/
2014
1/13
/201
5
1/27
/201
5
2/10
/201
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2/24
/201
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3/10
/201
5
3/24
/201
5
4/7/
2015
4/21
/201
5
5/5/
2015
5/19
/201
5
6/2/
2015
6/16
/201
5
6/30
/201
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7/14
/201
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7/28
/201
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8/11
/201
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8/25
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9/8/
2015
9/22
/201
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/201
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10/2
0/20
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11/3
/201
5
11/1
7/20
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12/1
/201
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12/1
5/20
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Cent
s Pe
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lon
Retail Diesel Fuel Price DifferencesCalifornia vs. United States and Selected States
California Less United States California Less WashingtonCalifornia Less Oregon California Less NevadaCalifornia Less Arizona
Source: CEC analysis of AAA prices.
California retail diesel fuel price premium to U.S. has increased 27.2 cpg between 12/31/14 and 12/15/15.Premium to WA has increased 5.7 cpg.Premium to OR has increased 7.3 cpg.Premium to NV has decreased 1.3 cpg.Premium to AZ has increased 18.9 cpg.
OPIS FUTC assessment for diesel fuel has averaged 12.9 cpg thru 12/15/15.
California Energy Commission12/16/2015 21
California Energy Commission12/16/2015 22
-7.5
1.0
-8.0 -9.0
-12.5
-3.0
-30
-20
-10
0
10
20
30
4012
/30/
2014
1/13
/201
5
1/27
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5
2/10
/201
5
2/24
/201
5
3/10
/201
5
3/24
/201
5
4/7/
2015
4/21
/201
5
5/5/
2015
5/19
/201
5
6/2/
2015
6/16
/201
5
6/30
/201
5
7/14
/201
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7/28
/201
5
8/11
/201
5
8/25
/201
5
9/8/
2015
9/22
/201
5
10/6
/201
5
10/2
0/20
15
11/3
/201
5
11/1
7/20
15
12/1
/201
5
12/1
5/20
15
Cent
s Pe
r Gal
lon
Diesel Fuel Refinery Spot Price BasisCalifornia vs. Pacific Northwest
California CARB ULSD Los Angeles Basis
California CARB ULSD Bay Area Basis
PNW EPA ULSD Basis
Source: Oil Price Information Service
California average refinery spot price premium to NYMEX diesel contract has averaged 1.9 cpg between 2/18/15 and 12/15/15. During the same period in 2014 the premium averaged 3.9 cpg.
California Energy Commission
Retail Fuel Price Tracking Observations
12/16/2015 23
• 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 Commission12/16/2015 24
Source: Michael Zwahlen, Sacramento Press
Additional Charts
California Energy Commission12/16/2015 25
-40
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California Gasoline Rack PricesBranded less Unbranded
Northern CaliforniaSouthern California
Source: Oil Price Information Service (OPIS).
Gap between branded and unbranded prices has been increasing.Frequency of inversions (unbranded higher than branded) has increased during 2015 and been more prevalent in Southern California where unplanned refinery outages have been more severe.