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I see 82% or so for the nation, though I do not have regional numbers. Interesting article below I pulled from Bloomberg.
By Robert Tuttle
Feb. 2 (Bloomberg) -- Gasoline, the worst energy investment
of 2008, is becoming this year’s hottest commodity as production
drops to a 17-year low and 24,000 U.S. refinery workers threaten
to strike.
Employees from Exxon Mobil Corp. to Royal Dutch Shell Plc
are ready to walk off the job should contract talks fail, after
negotiations were extended Jan. 31. Valero Energy Corp., the
biggest U.S. refiner, already idled as much as 30 percent of its
gasoline production capacity because of slowing demand.
ConocoPhillips, the second largest, says about 15 percent of its
refining capacity is off line.
A walkout may benefit refiners, helping them work off
inventories that are up 23 percent since Sept. 19, according to
Stephen Schork, president of the Schork Group, an oil consultant
in Villanova, Pennsylvania. At the same time, higher gasoline
prices would boost consumer costs as President Barack Obama
battles the worst slowdown since the Great Depression.
“A significant amount of refining capacity is now under
threat,” Schork said in a phone interview yesterday. “We’re
talking about a potential $1, $1.25 if you get a prolonged strike
that shuts in a considerable amount of gasoline production.”
Gasoline rallied 26 percent last month, the biggest gain on
the Reuters/Jefferies CRB index, to $1.2689 a gallon, the
equivalent of $1.867 a gallon at the pump. Prices tumbled 59
percent last year as a credit crises pushed the U.S., Europe and
Japan deeper into recession, cutting motor fuel demand.
Rising Prices
Gasoline futures may almost double to $2.50 as we approach
summer, Schork said. Prices may rise another 65 percent by May,
or 83 cents a gallon, to $2.10 a gallon, said Peter Beutel,
president of Cameron Hanover Inc., an energy consultant in New
Canaan, Connecticut.
The union for refinery workers and The Hague-based Shell,
which is representing the companies, extended talks on a new
contract after failing to meet their settlement deadline. The
deadline will be rolled over every 24 hours until a deal is
reached or the United Steelworkers terminates the contract and
gives strike notice. The union hasn’t picketed since 1980. The
contract was scheduled to expire at 12:01 a.m. Feb. 1.
The union is seeking higher wages, a cost-of-living
adjustment, and full medical, dental and vision-care benefits for
workers and retirees. Workers also want improvements in plant
safety practices after a March 2005 explosion at BP Plc’s
refinery in Texas City, Texas, killed 15 people and injured 170.
Lost Capacity
About 1.7 million barrels a day of capacity, or 8.7 percent
of the U.S. total, would be lost in a strike if the companies
shut refineries as threatened, according to data compiled by
Bloomberg News. Gasoline futures rose almost 10 percent last week
on the New York Mercantile Exchange on concern about a walkout.
BP, based in London, plans to close four refineries in
California, Texas, Ohio and Indiana in a strike. Valero will idle
plants in Tennessee and Delaware. Shell and Exxon Mobil plan to
keep operations running with contingency crews and managers.
Even before the strike threat, companies curtailed
operations after gasoline sold for less than crude oil in 55 of
66 days last quarter, meaning some lost money on every gallon
produced. In December, crude oil cost on average 85 cents a
barrel more than gasoline.
Refineries operated at 82.5 percent of capacity in the week
of Jan. 23, the lowest rate for this time of year since 1992,
according to the Energy Department in Washington.
Gasoline’s premium, called the crack spread, is likely to
widen to at least $20 a barrel by the spring in the U.S. from
$11.605 on Jan. 30, Beutel said. That increase would yield
$196,000 for a trader who sold $1 million of May Nymex crude oil
contracts and bought $1 million of May gasoline.
Maintenance Shutdowns
Maintenance shutdowns are also reducing supplies. U.S. East
Coast refineries are expected to cut gasoline output by 164,000
barrels a day next month, five times more than normal, according
to the Energy Department.
Valero, based in San Antonio, said Jan. 27 that average
operating rates for its refineries’ gasoline-making fluid
catalytic cracking units are running between 70 and 75 percent of
capacity to end losses that prevailed late last year.
“If the industry does not balance supply with demand, we
are going to have negative margins,” Valero Chief Executive
Officer William Klesse said on a Jan. 27 conference call.
Houston-based ConocoPhillips expects refinery use rates near
80 percent during the first quarter because of maintenance and
narrow margins for some plants. The company said its
Wilhelmshaven refinery in Germany will reduce production because
of deteriorating profitability.
Gasoline Demand
Falling gasoline demand is keeping prices in check.
Consumption, which declined in 2008 for the first time in 17
years, averaged 8.8 million barrels a day in the four weeks ended
Jan. 23, down 1.7 percent from a year earlier, Energy Department
data show.
Prices are “fighting a fundamentally very weak market that
has terrible demand dynamics,” Benjamin Dell, an analyst with
Sanford C. Bernstein & Co. in New York, said in a telephone
interview.
The decline in gasoline use has slowed, and sales will pick
up in the second half of the year as economies recover, Paul
Horsnell, head of commodities research at Barclays Capital in
London, said in a telephone interview. U.S. growth will be 2
percent in the fourth quarter, rebounding from a 3 percent
decline in the three months through March, economic forecasts
compiled by Bloomberg show.
“The overall demand profile does look better for the second
half of the year,” said Horsnell. “That has justified a move
away from these kind of negative” margins of last year.
Stimulus Bill
President Obama’s $819 billion economic stimulus bill,
currently moving through Congress, may encourage Americans to
drive more, said Andy Lipow, president of Houston-based Lipow Oil
Associates LLC and a former Goldman Sachs Group Inc. trader.
The average U.S. pump price, which typically lags behind
futures by four to eight weeks, increased 15 percent this year,
according to AAA, the largest U.S. motoring club. Prices fell
close to a 5-year low of $1.616 a gallon on Dec. 30, from a
record $4.114 in July. Crude oil settled at $41.68 a barrel on
the Nymex Jan. 30, down 6.5 percent this year.
“We see just a small increase in crude oil, if at all, but
we do see gasoline prices improving,” said James Cordier, money
manager at OptionSellers.com in Tampa, Florida.
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