Released on April 9, 2003
(Next Release on April 16, 2003)

Not So Fast
With U.S. commercial crude oil inventories increasing by 10.9 million barrels between March 7 and March 28, some analysts may be expecting crude oil prices, which had decreased significantly over that period, to continue falling. Just a few days ago, OPEC announced an emergency meeting for April 24 to discuss the possibility of production cuts, with some OPEC ministers stating that the market is oversupplied. But today�s release of the data as of April 4, indicates that it may be too soon to declare that oil markets are oversupplied.

The latest weekly data shows that U.S. commercial crude oil inventories fell by 3.6 million barrels, while crude oil imports dropped below 9 million barrels per day once again. Although the origins of weekly crude oil imports are preliminary and thus not published, crude oil imports from Nigeria appeared to be lower than normal last week. This was not altogether unexpected, as production in Nigeria has fallen recently due to ethnic violence. The drop in Nigerian imports explains much of the decline in aggregate, since crude oil imports from Saudi Arabia remained at very high levels for the second week in a row. Venezuelan crude oil imports appear to have stabilized at relatively high levels, but have not yet fully recovered to pre-strike levels.

U.S. Retail Gasoline Price Continues to Decline
The U.S. average retail price for regular gasoline fell last week for the third week in a row. Prices dropped by 1.9 cents per gallon as of April 7 to hit 163.0 cents per gallon, which is still 21.7 cents per gallon higher than a year ago. Over the last three weeks, the average price for regular gasoline has declined by 9.8 cents per gallon. The decline reflects, in part, the reduction in crude oil prices recently. Prices were down throughout the nation last week, with the largest decrease occurring in the Gulf Coast, where prices fell 3.1 cents per gallon. Retail prices in California remained above $2 per gallon for the sixth week in a row, decreasing to 211.5 cents per gallon. Average prices for the West Coast remained above $2 per gallon for the fourth week in a row, averaging 200.4 cents per gallon on April 7.

Retail diesel fuel prices decreased for the fourth consecutive week, falling 4.8 cents per gallon to a national average of 155.4 cents per gallon as of April 7. Diesel fuel prices are down in conjunction with recent drops in crude oil prices and in anticipation of looser market conditions. Retail diesel prices were down throughout the nation, with the largest price decrease occurring in New England, where prices fell 7.7 cents per gallon. However, prices in New England remained the highest in the nation, averaging 174.6 cents per gallon, while prices in the Gulf Coast were the lowest, averaging 146.5 cents per gallon.

Propane Inventories Moved Higher Last Week
U.S. inventories of propane continued to move higher last week with a 1.6 million-barrel build that positioned the nation�s propane supply at an estimated 21.1 million barrels as of the week ending April 4, 2003. Nonetheless, U.S. inventories remain on a track below the average range as primary stockholders struggle with the slow task of rebuilding inventories, following the largest ever winter stockdraw, measuring slightly less than 50 million barrels. Comparatively, the average winter draw on U.S. inventories over the past 5-year period was 34.4 million barrels. Last week, regional gains were reported across the major propane consuming regions, with East Coast and Midwest regions up nearly equal volumes of 0.4 million barrels, along with a 0.7 million-barrel gain reported in the Gulf Coast region. Inventories in the Midwest and Gulf Coast continued on tracks that were below their respective average ranges last week, while East Coast inventories moved into the average range.

This week marks the first week in which inventories for propylene for non-fuel use, which are a subset of total propane inventories, are shown separately. This new category of propane inventories will enable analysts and other users to more accurately access the volumes of propane that are intended for consumption within the nation's heating fuel markets.

Bulk terminal inventories of propylene for non-fuel use applications held in facilities in the East Coast, Midwest and Gulf Coast regions (PAD Districts 1, 2, and 3) totaled an estimated 2.0 million barrels last week, a level comprising about 9.3 percent of total U.S. propane/propylene inventories. While the percentage may appear relatively high, the proportion of propylene for non-fuel use to total propane inventories will typically be larger towards the end of the heating season when inventories are near their yearly lows. Conversely, when total propane inventories are near their peak prior to the start of the heating season, the percentage of propylene for non-fuel use to total propane inventories would be expected to be considerably lower. This inventory relationship is mainly due to the smaller range in propylene inventory movements over the course of the year in relation to the much larger range in total propane inventory movements over the same period.

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