EIA Short-Term Energy and Winter Fuels Outlook - National
Transcript of EIA Short-Term Energy and Winter Fuels Outlook - National
www.eia.govU.S. Energy Information Administration Independent Statistics & Analysis
EIA Short-Term Energy and Winter Fuels Outlook
forNational Association of State Energy OfficialsOctober 10, 2012 | Washington, DC
byAdam Sieminski, Administrator
Heating fuel market shares vary regionally
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Source: EIA Short-Term Energy Outlook, October 2012
DC
Number of homes by primary space heating fuel and Census Region, winter 2012-13
Northeast
South
Midwest
West
U.S. total115 million homes
natural gas
propaneheating oilelectricity
woodkerosene/other/no heating
Short-Term Energy and Winter Fuels OutlookOctober 10, 2012
U.S. current population-weightedheating degree-days
The U.S. winter 2012-13 heating season forecast is about 2% warmer than the 30-year average, but 18% colder than last winter
0
200
400
600
800
1,000
Oct Nov Dec Jan Feb Mar
2009-2010 2010-2011 2011-2012 2012-2013 (NOAA forecast)
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Note: Horizontal bars indicate monthly average degree days over the period 1971-2000.Source: EIA calculations based on NOAA state history and forecasts (August 15, 2012) weighted by same-year populations.
Expenditures are expected to increase this winter (October 1– March 31) for all fossil fuels
Percent change in fuel bills from last winter (forecast)
Fuel billBase case
forecastIf 10% warmer than forecast
If 10% colder than forecast
Heating oil 19 7 32
Natural gas 15 3 28
Propane * 13 - -
Electricity 5 2 11
* Propane expenditures are a volume-weighted average of the Northeast and Midwest regions. All others are U.S. volume-weighted averages. Propane prices in warm and cold cases are not available.
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Source: EIA Short-Term Energy Outlook, October 2012
EIA expects residential natural gas prices to closely follow last winter’s prices
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Jan 2008 Jan 2009 Jan 2010 Jan 2011 Jan 2012 Jan 2013 Jan 2014
Winter Residential price
Henry Hub spot price
ForecastHistorydollars per thousand cubic feet (mcf)
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Source: EIA Short-Term Energy Outlook, October 2012
Short-Term Energy and Winter Fuels OutlookOctober 10, 2012
EIA expects residential heating oil prices to average 2% higher this winter than last
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Jan 2008 Jan 2009 Jan 2010 Jan 2011 Jan 2012 Jan 2013
Winter Home heating oil retail price
Brent crude oil spot price
dollars per gallon
Forecast
Home heating oil retail price includes taxes.
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Source: EIA Short-Term Energy Outlook, October 2012
Short-Term Energy and Winter Fuels OutlookOctober 10, 2012
Heating oil remains much more expensive than natural gas
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25
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2004-05 2005-06 2006-07 2007-08 2008-09 2009-10 2010-11 2011-12 2012-13
natural gas heating oil
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U.S. average residential winter heating fuel pricesdollars per million Btu
forecasthistory
Winter (October - March)
Source: EIA Short-Term Energy Outlook, October 2012
Short-Term Energy and Winter Fuels OutlookOctober 10, 2012
Recent changes in the heating oil market
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U.S. distillate stocks are at the low end of the normal range
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100
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2010 2011 2012 2013 2014
million barrels Forecast
10% colder
Base case10% warmer
Note: Normal range (colored band) represents the range between the minimum to maximum from Jan. 2007 to Dec. 2011.
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Source: EIA Short-Term Energy Outlook, October 2012
History
Short-Term Energy and Winter Fuels OutlookOctober 10, 2012
Distillate inventories in the Northeast have been below their normal range since mid-summer
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Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
2012 2011 5 year average
U.S. Northeast Total Distillate Inventoriesmillion barrels
Source: EIA Weekly Petroleum Status Report
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Ultra-low sulfur diesel (ULSD) stocks are also low
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Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
2012 2011 5 year average
U.S. Northeast ULSD inventoriesmillion barrels
Source: EIA Weekly Petroleum Status Report
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Futures market indicates a reduced incentive to hold inventories
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JAN FEB MAR APR MAY JUN JUL AUG SEP OCT NOV DEC
2012 2007-2011 Average
backwardation: incentive to sell out of inventory
contango: incentive to hold inventory
Time spreads for NYMEX heating oil futures contractscents per gallon
Source: Bloomberg LP
Note: Data are the average monthly first - third contract
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Arbitrage between New York Harbor and Europe has closed
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Jan-09 Jul-09 Jan-10 Jul-10 Jan-11 Jul-11 Jan-12 Jul-12
favors shipments to New York from Europe
favors shipments to Europe from New York
Transatlantic Distillate Arbitrage: New York Harbor - Northwest Europe cents per gallon (five year average)
Source: Bloomberg LP
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Other factors that could lessen tightness in Northeastern distillate markets headed into the winter
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• Delta Air Line’s Trainer Refinery near Philadelphia is slated to restart in early October after being idle for the last year
• Colonial Pipeline’s completion of a 55,000 bbl/d capacity expansion of a distillate pipeline from Houston, Texas and the 60,000 bbl/d expansion from a pipeline from Greensboro, North Carolina
• Additional production could come online from other Northeast refineries to take advantage of the strength in the distillate market
Changes in Northeast heating fuel consumption
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• The Northeastern heating oil market is declining, though it remains the primary fuel in some areas
• Connecticut announced a plan to expand natural gas distribution networks
• Consumers are also supplementing liquid heating fuels with wood and electricity –wood pellet use has been growing in New England
• Production from shale gas in Pennsylvania has increased access to natural gas in Northeastern markets
Secondary heating is most prevalent for homes using heating oil or Propane/LPG as their main heating source
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5%
10%
15%
20%
25%
30%
35%
natural gas propane fuel oil electricityMain heating source
electricitywoodnatural gas
Secondary heating source
percent of households
Source: EIA Residential Energy Consumption Data, 2009
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Short-Term Energy and Winter Fuels Outlook October 10, 2012
EIA updates state level data sets with mapping features and energy infrastructure datasets
Interactive map links to state level energy data
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States pages include EIA datasets and analysis on all fuels and energy infrastructure included in EIA data collection
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“Help” feature an instructional video as well as information about navigation and the tools that are available
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For more informationU.S. Energy Information Administration home page | www.eia.gov
Short-Term Energy Outlook | www.eia.gov/steo
Annual Energy Outlook | www.eia.gov/aeo
International Energy Outlook | www.eia.gov/ieo
Monthly Energy Review | www.eia.gov/mer
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