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Unleaded gasoline prices moved sharply higher in 1999 as the Organization of Oil Exporting Countries (OPEC) agreed to and then adhered to production cuts. Smaller supplies of petroleum will in time mean that there will be smaller supplies of finished motor gasoline. Additionally, the continued strength of the U.S. economy implied that demand for energy products was more likely to increase. Production of gasoline follows a seasonal pattern. Going into the peak driving season of June-September, petroleum refineries increase production of gasoline to build inventories. At the end of the summer driving season, refineries switch to the production of heating oil for the winter heating season. Another feature of the energy market is that the U.S. is becoming more and more dependent on imports of various energy products to meet growing demand. This, in turn, makes the U.S. subject to changes in export policies by the countries that export energy products. U.S. production of finished motor gasoline in August 1999 was 8.3 million barrels per day. That represented a decline of almost 2 percent from the previous month. In August 1998, gasoline production was 8.2 million barrels per day. Over the January-August 1999 period, production of finished motor gasoline averaged 8 million barrels per day. This was slightly below the average of the same period in 1998, but 3 percent more than in 1997. For all of 1998, gasoline production averaged 8.1 million barrels per day. In 1990, production averaged 7 million barrels per day while in 1985 it averaged 6.4 million barrels per day. U.S. imports of finished gasoline in August 1999 averaged 356,000 barrels per day, a decline of 18 percent from the previous month. In August 1998, imports averaged 331,000 barrels per month. In the January-August 1999 period, imports of gasoline averaged 380,000 barrels per day, an increase of 23 percent from the same period of 1998 and some 15 percent more that in the same period of 1997. For all of 1998, imports averaged 311,000 barrels per day. In 1990, imports averaged 342,000 barrels per day while in 1985 they averaged 381,000 barrels. U.S. exports of motor gasoline in August 1999 averaged 120,000 barrels per day, an increase of 35 percent from the previous month. In August 1998, exports averaged 141,000 barrels per day. In the January-August 1999 period, exports averaged 98,000 barrels per day, down 20 percent from the same period in 1998 and 19 percent less than the like period in 1997. For all of 1998, exports averaged 125,000 barrels per day. In 1990, exports of gasoline averaged 55,000 barrels per day while in 1985 they averaged 10,000 barrels. Ending stocks of finished gasoline at the end of August 1999 were 157 million barrels, down 4 percent from the previous month. In August 1998, ending stocks were 167 million barrels. Ending stocks of gasoline, along with blending components, at the end of August 1999 were 199 million barrels, down 2 percent from the previous month. Ending stocks of oxygenates at the end of July 1999 were 13 million barrels. Futures markets Unleaded gasoline futures and options are traded on the New York Mercantile Exchange (NYMEX).

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Excerpted from the CRB Commodity Yearbook.