refined products line north american markets cera alert decem ber 15 2000 cera alert december 15 2000 title refined products line north american markets cera knowledge areas refined products us margin highlights responding falling apparent demand rising primary inventory levels us gulf coast unleaded gasoline margins versus wti fell 2 26 per barrel average 1 45 per barrel november gasoline margins returned historically normal range spending summer 2000 exceptionally high values cera expects gasoline margins wti average 2 75 per barrel first quarter new year 1 16 per barrel lower year first quarter average high sulfur 2 fuel oil differentials wti dropped slightly averaging 5 97 per barrel november despite drop 0 37 per barrel october average fuel oil differentials remain unprecedented values 4 20 per barrel higher year ago 3 46 per barrel greater previous five year average first quarter 2001 cera anticipates distillate margins moderate somewhat remain record high level 4 75 per barrel first quarter jet kerosene differentials versus wti rose 0 63 per barrel october average reaching whopping 8 59 per barrel november correspondence distillate market jet kerosene margins historically high levels receiving support relatively tight fundamentals cera expects jet kerosene margins moderate somewhat first quarter response seasonal weakening demand following holiday travel season remain exceptionally strong average 5 75 per barrel margins us gulf coast 1 sulfur residual fuel dropped 2 15 per barrel reaching 3 99 per barrel wti november despite recent widening differentials cera expects soaring natural gas prices support relatively narrow residual fuel differentials throughout winter months residual fuel differentials expected average 2 50 per barrel wti first quarter next year high end historical range us demand highlights apparent demand unleaded gasoline fell seasonally 0 5 million barrels per day mbd october level reaching 8 36 mbd four weeks ending december 8 demand averaging less 1 percent last year largely 2 k concerns helped inflate december demand year ago cera anticipates gasoline demand continue decline seasonally colder temperatures arrive averaging 8 08 mbd first quarter 2001 reported distillate apparent demand remains exceptionally strong 3 94 mbd four weeks ending december 8 7 percent greater time last year represents slight increase 0 05 million barrels mb end october level 3 90 mb still record high level early december support low home heating oil inventories particularly northeast distillate demand strong fall 2000 cera expects demand remain strong coming winter months averaging 3 79 mb first quarter next year apparent demand jet fuel declined 5 percent october level reach 1 68 mbd four weeks ending december 8 despite decline apparent jet fuel demand 1 percent year ago level relative strength jet fuel reported demand continues parallel distillate demand strength support coming use jet fuel help mitigate tight distillate market fundamentals cera expects demand jet fuel average 1 81 mb fourth quarter reported demand residual fuel dropped 0 87 mbd four weeks ending december 8 decline 0 09 mbd october average slight increase november level demand residual fuel currently 11 percent greater last year surging natural gas prices expected result continued strong residual fuel demand throughout winter residual fuel demand expected remain 0 85 0 9 mbd range first quarter 2001 us inventory highlights primary inventories unleaded gasoline rose 196 5 mb increasing almost 10 mb end october value responding rising stock levels declining apparent demand forward supply coverage gasoline climbed 23 5 days four weeks ending december 8 forward supply 2 5 percent last year level time year lowest level past eight years although cera still believes coverage currently sufficient level demand expected winter however cera looking cautiously implications high distillate refinery yields production possibility low gasoline inventories start driving season second quarter next year distillate inventory coverage remained level since end october 29 2 days forward supply four weeks ending december 8 despite record high apparent demand strong refinery production levels helped boost primary distillate inventories slightly 115 3 mb period primary stocks 16 percent last year level time lowest historical level ever although stocks low cera anticipate shortages occur winter assuming normally cold weather refinery production net imports expected capable meeting demand requirements albeit high price jet fuel inventory coverage crept upward 1 day coverage reach 25 7 days forward supply four weeks ending december 8 moves jet fuel coverage 23 5 25 days supply range past four months rise 1 day forward supply mainly response decline apparent demand jet inventories coverage expected become tighter coming weeks pull tight distillate markets strengthen supplies expected adequate winter inventory coverage residual fuel rose almost 4 days forward supply october reaching 41 7 days forward supply four weeks ending december 8 increase coverage temporary response drop demand increase stocks demand expected strengthen colder weather high gas prices cera looks inventories coverage gradually decline coming weeks end cera alert available pdf format within 24 hours electronic message attachments contain information cambridge energy research associates inc cera confidential may privileged unauthorized disclosure copying distribution use contents message attachments whole part strictly prohibited terms use http www cera com tos html questions comments webmaster cera com copyright 2000 cambridge energy research associates