The Impacts of Rising The Impacts of Rising Gasoline Prices Gasoline Prices Doug MacIntyre Doug MacIntyre Energy Information Administration Energy Information Administration September 30, 2005 September 30, 2005 Metropolitan Washington Council Metropolitan Washington Council of Governments of Governments
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The Impacts of Rising Gasoline Prices Doug MacIntyre Energy Information Administration September 30, 2005 Metropolitan Washington Council of Governments.
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The Impacts of Rising The Impacts of Rising Gasoline PricesGasoline Prices
Doug MacIntyreDoug MacIntyreEnergy Information AdministrationEnergy Information Administration
September 30, 2005September 30, 2005
Metropolitan Washington Council Metropolitan Washington Council
of Governmentsof Governments
U.S. Average Retail Regular Gasoline Prices U.S. Average Retail Regular Gasoline Prices
$1.00
$1.50
$2.00
$2.50
$3.00
$3.50
J F M A M J J A S O N D
$/G
allo
n
2000 2001 2002 2003 2004 2005
Source: EIA Weekly Retail Gasoline Price Survey.
Retail Regular Gasoline PricesRetail Regular Gasoline Pricesin DC Areain DC Area
$1.00
$1.50
$2.00
$2.50
$3.00
$3.5001
/01/
03
03/0
1/03
05/0
1/03
07/0
1/03
09/0
1/03
11/0
1/03
01/0
1/04
03/0
1/04
05/0
1/04
07/0
1/04
09/0
1/04
11/0
1/04
01/0
1/05
03/0
1/05
05/0
1/05
07/0
1/05
09/0
1/05
US DC
MD VA
Source: AAA Fuel Gauge Report
DC Retail Regular Gasoline PricesDC Retail Regular Gasoline Prices
VA Retail Regular Gasoline PricesVA Retail Regular Gasoline Prices
$1.00
$1.50
$2.00
$2.50
$3.00
$3.50
1/1
2/1
3/1
4/1
5/1
6/1
7/1
8/1
9/1
10/1
11/1
12/1
2002 2003
2004 2005
Source: AAA Fuel Gauge Report
Taxes - a monthly national average of federal and state taxes applied to gasoline or diesel fuel
Distribution & Marketing Costs & Profits - the difference between the average retail price of gasoline as computed from EIA's weekly survey and the sum of the other 3 components
Refining Costs & Profits - the difference between the monthly average of the spot price of gasoline (used as a proxy for the value of gasoline as it exits the refinery) and the average price of crude oil purchased by refiners (the crude oil component).
Crude Oil - the monthly average of the composite refiner acquisition cost, which is the average price of crude oil purchased by refiners
What We Pay For In a Gallon of Regular GasolineWhat We Pay For In a Gallon of Regular GasolineAugust 2005August 2005
WTI Crude Oil Prices Expected to Remain High in WTI Crude Oil Prices Expected to Remain High in September Short-Term Energy OutlookSeptember Short-Term Energy Outlook
Sources: History: EIA; Projections: Short-Term Energy Outlook, September 2005.
World oil demand growth, led by China, is surging at very high rates
-0.5
0.0
0.5
1.0
1.5
2.0
2.5
3.0
1991-1999Avg.
2000 2001 2002 2003 2004 2005 2006
Mill
ion
Ba
rre
ls p
er
Da
y
China
US
Recent World Oil Demand Growth Has Been StrongRecent World Oil Demand Growth Has Been Strong
Sources: History: EIA; Projections: Short-Term Energy Outlook, September 2005, Medium Recovery Case.
0.0
1.0
2.0
3.0
4.0
5.0
6.0
1991-1997
Average
1998 1999 2000 2001 2002 2003 2004 2005 2006
Mil
lio
n B
arre
ls p
er D
ay
Forecast
Spare capacity hit its lowest level in 30 years in 2005; little increase in 2006
Spare Production Capacity is MinimalSpare Production Capacity is Minimal
Sources: History: EIA; Projections: Short-Term Energy Outlook, September 2005, Medium Recovery Case.
2.3
2.4
2.5
2.6
2.7
2.8
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
Bil
lio
n B
arr
els
NOTE: Colored Band is Normal Stock Range denoting average inventories from 1998-2002.
OECD Commercial Inventories
2002
2003
20002004
2005
OECD Commercial Oil Inventories Remain OECD Commercial Oil Inventories Remain Better than Last Year Through JulyBetter than Last Year Through July
Source: History through July 2005: Oil Market Report, IEA, September 2005.
0
10
20
30
40
50
60
70Ja
n-9
0
Jan
-91
Jan
-92
Jan
-93
Jan
-94
Jan
-95
Jan
-96
Jan
-97
Jan
-98
Jan
-99
Jan
-00
Jan
-01
Jan
-02
Jan
-03
Jan
-04
Jan
-05
Jan
-06
20
05
Do
lla
rs p
er
Ba
rre
l/D
ay
s S
up
ply
0
2
4
6
8
10
12
14
Mil
lio
n B
arr
els
pe
r D
ay
WTI Spot Price (2005 $)OECD Days SupplyWorld Excess Production Capacity (right axis)
Low Excess Capacity and Low Days of Supply Are Low Excess Capacity and Low Days of Supply Are Fundamentals Supporting High Crude PricesFundamentals Supporting High Crude Prices
Sources: WTI: Reuters; OECD Days Supply: International Energy Agency & EIA Estimates; World Excess Production Capacity: EIA estimates.
180
190
200
210
220
230
240
Jan-02 Jan-03 Jan-04 Jan-05 Jan-06
Mil
lio
n B
arre
lsU.S. Total Gasoline InventoriesU.S. Total Gasoline Inventories
Sources: History: EIA; Projections: Short-Term Energy Outlook, September 2005.
Actual Forecast
NOTE: Colored Bands are Normal Stock Ranges
8,000
8,250
8,500
8,750
9,000
9,250
9,500
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
Th
ou
san
ds
of
Bar
rels
per
Day
2002
2003
20042005
(estimate)
U.S. Finished Gasoline DemandU.S. Finished Gasoline Demand
Sources: History: EIA
Plantation and Colonial PipelinesPlantation and Colonial Pipelines