Working together: Refined Fuels Demand and EIA’s WPRS

The more you know, the better—it’s essentially true in every environment. For oil and gas markets, having accurate and timely data to better understand price, supply, and demand can help define and defend your market strategies.

Two valuable data sources of information on the outlook and supply within the U.S. petroleum markets are the weekly petroleum status report (WPRS), produced by the Energy Information Agency (EIA), and Refined Fuel Demand (RFD), an intelligence subscription produced by DTN. The purpose and scope of this blog will be to compare the data components of each, understand how market participants use and may potentially benefit from both.

For refined fuels markets, EIA provides policy-independent data, market forecasts and analyses of imports, exports, production, supply, demand, consumption, stocks, prices, trade, and emissions of crude oil and petroleum products. Similarly, Refined Fuel Demand from DTN delivers independent volumetric and transactional market data enabling its customers to leverage direct-source intelligence.

Together both deliver market insights for the gas and oil industry that include production and demand metrics such as volume, mix, lift costs, transportation routes, production efficiency, and environmental impacts and emissions.

It goes without saying, in highly competitive markets, intelligence is everything. Let’s look at how RFD and EIA information differs for its users in terms of accuracy, timeliness, granularity, and usefulness within the oil and gas industry, and further, how when used in conjunction can be an intelligence advantage.

 

Accuracy

EIA data is collected weekly by survey of industry producers, refiners, importers, exporters, and pipeline operators. Conversely, RFD data is pulled from real-time electronic transactions quantifying the actual volume of fuel lifted at the rack by wholesalers and carriers capturing up to 85% of daily transactions.

EIA information includes supply and forecast outlook at national, regional, and state levels, while RFD data produces the wholesale demand volume of gasoline, diesel, and bio components by grade at the rack city level, at PADD levels, and at terminals.

WPSR from EIA estimates the demand for petroleum products based on the supply and disposition data collected from varying participants in the petroleum industry, such as producers, refiners, importers, exporters, and pipeline operators.

DTN asserts RFD to be the most accurate measure of wholesale demand for gasoline and diesel in the U.S., as it captures the actual volume of fuel lifted at the rack by wholesalers and distributors through electronic transactions.

RFD may have an edge over WPSR in terms of accuracy, as RFD reflects actual products sold and tracked by market transactions, rather than estimated or reported data, which has greater potential for error due to human interaction (mis-keyed data, dishonesty/deception) or sheer variances from respondents.

 

Access and Timeliness

Users can access EIA’s raw data free of charge through the U.S. Government’s open-data portal. Users should be used in compliance with their copyrights and reuse policy. DTN Demand is subscription-based access.

DTN Demand provides daily data on the wholesale demand of gasoline and diesel by grade at the rack city and PADD levels. WPSR provides weekly data on the supply and disposition of crude oil and petroleum products at national, regional, and state levels with historical data back to 1990.

With daily updated e-transaction data, DTN Demand may have an advantage over WPSR in terms of timeliness, delivering more frequent and up-to-date data. Timeliness is a big advantage in monitoring market demand, identifying new opportunities and fluctuation challenges, and making better informed decisions.

 

Granularity

When it comes to hyperlocal, RFD offers more granular data on the wholesale demand of gasoline and diesel by grade at the rack city and PADD levels, which can help traders and wholesalers to understand the regional and local variations in the market. At the PADD and US level, DTN Demand is providing data about Biofuels consumption and blend rates.

EIA WPSR provides more aggregated data on the supply and disposition of crude oil and petroleum products at the national, regional, and state levels, which can help the industry to understand the overall picture of the market.

In terms of granularity, RFD may again have a benefit over WPSR, as DTN provides more detailed and specific data, which can help to optimize pricing, inventory, and supply chain strategies.

 

Usefulness

As stated initially, more data provides more opportunities. Market strategists and data scientists use current and historical data to monitor oil and refined product market trends, such as the changes in production, consumption, imports/exports, inventories, prices and inventory of crude oil and petroleum products. This can help to understand market dynamics, identify opportunities and challenges, and make informed decisions.

Meanwhile others are assessing future market supply, demand outlooks, and price projections under different scenarios and assumptions. This can help to anticipate the potential impacts of various factors, such as economic growth, EV adoption and its impact on gasoline, policy changes, and environmental regulations, on the energy sector and the economy.

And while RFD and EIA both provide useful information for the oil and gas industry, depending on specific needs and objectives, each has its benefits for shaping how businesses make decisions.

EIA can help the industry to assess the outlook of the market and anticipate the potential impacts of various factors, such as economic growth, technological innovation, policy changes, and environmental regulations.

While DTN Demand can help the industry to better understand their market share and make more confident, near real-time operational and pricing strategies.

 

RFD vs WPSR: A comparison

	WPSR from EIA	RFD from DTN
Accuracy/Source	Survey respondents	Actual transactions
Timeliness	Weekly	Daily
Granularity	State/Regional/National	Rack City/PADD/US
Access	Open Source	Subscription

 

Conclusion

Ultimately, RFD and EIA can complement each other, as they can provide different perspectives and insights within the petroleum market. The industry should use both sources of data to gain a more comprehensive and balanced understanding of the market.

With caution and critical thinking, industry professionals can use both sources of data to make operational decisions. With awareness of potential limitations or uncertainties, insights can be deduced, and opportunities identified to make stronger profits when using these sources of industry intelligence.

Some pricing strategy advantages that traders can gain from Refined Fuel Demand data from DTN are:

• Access timely, accurate, and granular data on the wholesale demand of gasoline and diesel by grade at the rack city and PADD levels. This can help them identify market trends, opportunities, and risks more effectively than relying on lagging or inaccurate indicators.
• Use volume-weighted settlements to factor intraday price and volume volatility into OTC settlements. This can help capture the best value for trades and avoid losses due to price fluctuations.
• Use predictive models to better identify the markets that will yield the highest returns with product values and daily demand figures to support statistical price/demand correlations. Predictive models can also optimize inventory, supply chain, and export strategies.
• By leveraging the unique position DTN has within downstream transactions, nearly 85% of all U.S. transactions, RFD can give an edge over competitors who may not have access to the same comprehensive, reliable data.
• There are additional benefits of DTN data and insights. DTN has extensive expertise in weather forecasting, which brings intelligence to shipping routes and off-shore risks, to better manage costs and safety, to anticipate and mitigate the impacts of weather events on their operations, assets, and customers.

Further, markets can benefit from DTN data communication solutions and transaction efficiency to help optimize fuel reconciliation, inventory management, supply chain, and export strategies. This can help reduce costs, increase margins, and improve customer satisfaction.

To put market demand data to use, click here for Refined Fuels Demand from DTN.