Jet Fuel Supply/Price Outlook - Fueling the Recovery

1
Jet Fuel Supply/Price Outlook Fueling the
Recovery Energy Information Administration
Presentation to 4th International Jet Fuel
Conference February 11, 2002
2
EIA Petroleum Data

• Information Available at EIA
• Supply and Price Data
• Forecasts and analysis
• Where to Find EIA Information
• www.eia.doe.gov
• Publications
• Ad hoc requests

3
EIA on the World Wide Web
4
EIA Petroleum Data Publications

• Weekly Petroleum Status Report
• This Week in Petroleum
• Petroleum Supply Monthly and Annual
• Petroleum Marketing Monthly
• Annual Fuel Oil and Kerosene Sales Report

5
EIA Forecast Publications

• Short-term Energy Outlook
• Annual Energy Outlook
• International Energy Outlook

6
WTI Crude Oil Price Potential for Volatility
Around Base Case
Sources History EIA Projections Short-Term
Energy Outlook, February 2002.
7
OPEC 10 Crude Oil Production Is Much Lower After
Quota Cuts in 2001 2002
History
Projections
Sources History EIA Projections Short-Term
Energy Outlook, February 2002.
8
EIAs World Petroleum Balance
Sources History EIA Projections Short-Term
Energy Outlook, February 2002.
9
Low Total OECD Oil Stocks Keep Market Balance
Tight
Total includes commercial and government stocks.
Source History -- EIA
10
Fundamentals Explain High Crude Oil Prices
Source EIA and OECD
11
U.S. Reflects World Market
Sources History EIA Projections Short-Term
Energy Outlook, February 2002.
12
Crude Oil Inputs Ended 2001 at Normal Levels
Dec 2000 Was Unusually High
Source EIA
13
The Cycle of Refinery Inputs andProduct
Inventories
Increase in Crude Inputs (Summer 2001)
Increase in Product Stocks (Fall 2001)
Increased Refinery Margins (Summer 2002)
Decrease in Product Stocks (Spring 2002)
Reduced Refinery Margins (Early Winter
2001/02)
Decrease in Crude Inputs (Late Winter 2001/02)
14
Drop in Demand Leaves Spare Capacity - For Now
Source EIA
15
Jet Fuel Inventories Will Fall Back to Earlier
Levels
Source EIA
16
Prices Will Follow Crude Oil, Refinery Margins
Source EIA
17
In the Longer Term, U.S. Product Demand Will
Further Outstrip Refinery Capacity
Refinery Capacity
Other
Residual Fuel
Distillate
Jet Fuel
Gasoline
Source EIA
18
Global Refinery Capacity Will Have to Grow
Dramatically
Source EIA
19
Conclusions

• Despite recent output cuts, weak global demand
  will let oil prices rise only moderately this
  year
• The decline in jet fuel demand since 9/11 has
  left excess capacity in the system - in the short
  run
• Over the longer term, in the U.S. and worldwide,
  demand for jet fuel (and other petroleum
  products) will far outstrip existing refinery
  capacity
• Global refinery capacity, along with oil
  production, must grow dramatically over the next
  20 years in order to supply needs for all refined
  products