As far as production, the EIA U.S. total crude oil production to average 6.3 million barrels per day (bbl/d) in 2012, an increase of 0.6 million bbl/d from last year, and the highest level of production since 1997. Projected U.S. domestic crude oil production increases to 6.7 million barrels in 2013.
They also bring up the impact of the drought on ethanol production as that EIA says that ethanol production fell from 920 thousand bbl/d for the week ending June 8, 2012 to 809 thousand bbl/d for the week ending July 27, 2012. EIA has reduced its 2012 ethanol production forecast from 900 thousand bbl/d or 13.8 billion gallons in last month's Outlook to 870 thousand bbl/d (13.3 billion gallons) and expects ethanol production to recover in the second half of 2013, averaging about 880 thousand bbl/d for the year.
The EIA also reported that natural gas working inventories ended July 2012 at an estimated 3.2 trillion cubic feet (Tcf), about 17 percent above the same time last year. EIA expects the Henry Hub natural gas spot price, which averaged $4.00 per million British thermal units (MMBtu) in 2011, to average $2.67 per MMBtu in 2012 and $3.34 per MMBtu in 2013.
Gasoline, as reported by Bloomberg News, hit a 12 week high after the Chevron fire. Bloomberg also reported that U.S. gasoline demand fell 0.9 percent last week as prices at the pump rose to a seven-week high, according to data from MasterCard Inc. Drivers bought 8.87 million barrels a day of gasoline in the week ended Aug. 3, down from 8.95 million the prior week, MasterCard’s SpendingPulse report showed. Gasoline consumption in the week ended July 27 was up 1.2 percent from the seven days ended July 20. MasterCard releases weekly data every two weeks. The average pump price rose 5 cents in the past week to $3.53 a gallon, following a 5-cent gain in the week ended July 27. Prices reached a year-to-date peak of $3.94 on April 6. Drivers are paying 4.6 percent less than a year earlier. The highest prices were on the West Coast, where the average rose 1 cent to $3.73 a gallon. The lowest average was on the Gulf Coast, where a gallon gained 2 cents to $3.34. Fuel consumption last week was 3 percent below the year- earlier level, the 49th straight drop in that measure. Year-to- date gasoline demand is 4.6 percent below 2011. Fuel use over the previous four weeks fell 4 percent below the same period in 2011, a record 72nd consecutive drop in that measure.
Brent crude oil has been strong on maintenance. Add to that an expected increase in Chinese demand and that is keeping Brent buoyant. Dow Jones reports that China July oil Imports should recover this month. China's oil imports and refinery throughput are expected to recover from June, when they fell to their lowest levels in the year to date due to weak demand for refined fuels and heavy 2Q refinery maintenance.