Vital signs : no end in sight to high revenues for producers (and headaches for consumers)

Prices for petroleum products in North America have been on a roller coaster ride for a while now, with prices remaining high for the normally more dormant summer season. Although it is beneficial to producers, consumers are not as happy about the situation. Refinery problems, growing demand and product proliferation have combined to create this situation. Refineries on the East Coast of the United States were forced to extend the required maintenance period in the spring since they had been running non-stop to meet the requirements of last winter. Canadian refiners benefited from the situation. They enjoy strong refining margins. Canadian refined-product exports jumped 22 per cent higher in February of 2001 when compared to February 2000. Heavy fuel oil exports in January and February were especially strong, as the industrial boilers in the United States were feeling the effects of the very high natural gas prices. A similar phenomenon was reflected in exports of gasoline and crude oil. The commissioning last year of the Alliance Pipeline and successful exploration programs in British Columbia ensured it led the pack. The crude production in Saskatchewan was up 11.4 per cent due to the widespread horizontal drilling and recovery programs. To ensure adequate winter peaking supplies, storage injections are lagging behind, which tends to indicate that gas prices will remain high for the remainder of the year. 7 tabs., 4 figs