The graph above of distillate stocks from the EIA's This Week in Petroleum has been occasioning some interested comment. It shows that stocks of distillates (ie diesel and heating oil taken together) are low in the US northeast relative to recent history for this time of year. I was curious to know if this was explained by dropping consumption of heating oil in the US generally, but there isn't a sharp sign of a drop off in the last year or two:
This is an interesting situation in light of the record lows in Arctic sea ice this fall. Specifically the US northeast is going into the beginning of winter with unusually small stocks of heating oil and yet all that uncovered Arctic ocean is going to give rise to more than the historical amount of atmospheric moisture in northern climates. That pretty much has to show up in December as a lot of snow somewhere.
Presumably, we are hoping that "somewhere" won't be the northeastern US. Otherwise heating oil prices could spike dramatically.
6 comments:
Perhaps "explained" by a reaction to last year's absurdly mild winter? I'm not sure that makes sense, but maybe anyone stockpiling oil above and beyond the norm got really whacked by reduced consumption in the last winter.
And snow, by itself, is not what causes oil consumption; it's the cold that does that. I recall we've had two snow-record-breaking winters here in the last 20 years; the first, was quite cold and the snow stacked up everywhere, but the second was mild and even though it snowed often and deep, it would melt away between storms.
ok, it's clear & intuitive that there will be an increase in orographic precipitation in higher elevations downwind of an open arctic ocean...but it doesnt follow that it would be colder, such as to increase heat oil consumption...
I should think that there also might be residual oil sitting in the consumer's oil tank at home.
Still, this, and some other inputs, might be being overly discounted in the current price.
Your graph needs to be much more stream-specific. The data you want is for New England (PADD 1A) Prime Supplier Sales Volumes of Petroleum Products. This shows the seasonality for fuel oil quite clearly. The Refiner Sales Volumes data is weird - it seems to vanish entirely for months at a stretch, going back to 1995; before that though they have detailed numbers. Must have passed some legislation to protect refiners' propriety.
The pattern is of persistent decline in heating oil consumption, same as with other low value uses for petroleum such as power generation.
Why would more snow lead to higher heating oil use? Snow insulates quite well when it is really cold, in no small part by reducing drafts under houses.
@Stuki, snow insulates. But ultimately its the snow gets effects by the warmth of the house. And thus it melts. You could say the same about iglo's the snow bricks isolate you from the cold. Yet you still should lay on a plateau to prevent you from sleeping in a cold draft. (i'm not sure if I can explain it properly... do you understand what I mean?)
@Stuart. Personally I think that investments in distillates stagnated in recent years? due to lower consumption? Inventories rose in 2010, and dropped after that because consumption has remained relatively low. But you're right in saying the coming years will be interesting with regard to weather ~ consumption. Have you looked at the solar intensity and the relationship with progress?
Post a Comment