Gasoline Supply Low, But U.S. Not Quite Running on Fumes Graphic
NEW YORK (AP) _ If America had a fuel gauge on its gasoline supply, it would be running close to empty.
The U.S. stockpile of gasoline has fallen to within less than a percentage point of what the government considers the minimum operating level, but experts say there’s no need for people to get nervous and top off their tanks.
″It’s temporary thing and it should go away,″ said Rita Beale, an analyst who follows gasoline pricing for Shearson Lehman Brothers Inc.
An advisory panel to Energy Secretary James Watkins has said the nation should keep at least 205 million barrels of gasoline on hand. This week, the American Petroleum Institute reported that the stockpile had fallen to 206.5 million barrels, which sent crude oil prices higher around the world.
Although the National Petroleum Council says 205 million barrels is ″the level below which operating problems and shortages would begin to appear,″ oil experts say there is no real danger in briefly getting near that level or even briefly falling slightly below it.
Staying that low for a while could cause problems, but the recent plunge in the gasoline stockpile is probably a short-term phenomenon explained largely by the changing seasons.
Oil companies are now unloading gasoline made for the winter and gearing up to refine summer fuel. Under laws intended to protect the environment, gasoline is blended differently from season to season to minimize the amount of evaporation.
The oil companies have also had a number of refineries shut down for seasonal maintenance but they are coming back on line, which analysts believe should soon lift the gasoline supply well above the minimum.
″If there is anytime you get near that, it’s this time of year,″ said Bill Hermann, chief economist for Chevron Corp. ″We’re not down to that level yet, and presumably we won’t get there.″
Still, drifting near the magic number has made many in the industry and the government take notice.
″The stocks are lower than we would like to see them at this time, but we are monitoring the situation very closely,″ said M.J. Jameson, spokeswoman for the energy secretary. ″We have plenty of excess refining capacity out there, and that is very important.″
The nation also has an adequate supply of crude oil. The API report this week put the number at 336.4 million barrels, while the minimum operating level is 300 million barrels.
″If crude was down at its minimum level as well as gasoline, then we’d have to worry,″ Beale said.
Even though there is no reason for concern among consumers, she said, there is a potential for people to panic if they are misled by news accounts of the shrinking gasoline supply.
″The press could or could not incite consumers to hold inventories in their tanks,″ she said.
The dwindling stockpile has only pushed up gasoline futures by a penny or two per gallon, and motorists should not worry that prices at the pump will soar like they did last fall, industry experts said.
But one consumer advocate said people may soon be in for a bit of a jolt when they gas up.
″Prices are probably going to start moving up rather rapidly,″ said Edwin S. Rothschild, energy policy director for Citizen Action in Washington. ″I suspect we’re talking about 10 or 15 cents a gallon over the next four to six weeks.″
The figure of 205 million barrels of gasoline may sound like a lot and it is, at least when compared with daily consumption. America, the world’s biggest gas guzzler, burns about 7.5 million to 8 million barrels of gasoline a day, half the nation’s total use of oil.
But experts say considerably more fuel needs to be kept on hand because the supply and distribution system is a complicated network that keeps vast quantities of gasoline moving at any one time. For example, gasoline pipelines must always stay ″wet″ with fuel to keep flowing, much as a hose that is siphoning liquid cannot be allowed to run dry or the movement will stop.
Vast quantities of oil are always en route to the United States. Even after the Iraqi invasion of Kuwait in August, and the subsequent global boycott of their crude oil, for example, Iraqi crude that had already left port in the Middle East kept arriving in the United States for weeks.
″At any one moment, there are probably 600 to 700 million barrels of oil afloat,″ Hermann said. ″That’s in some sense an inventory.″