Consumption of petroleum products in the world’s top oil consumer, the United States, has fallen to its lowest level in decades, as lockdowns restrict travel and the economy slows, the U.S. Energy Information Administration (EIA) said on Thursday.
According to EIA’s estimates of petroleum products supplied—its proxy metric for consumption—demand for petroleum products in the latest reporting week to April 17 was 14.1 million barrels per day (bpd), up slightly from the 13.8 million bpd estimated consumption in the previous week, which was the lowest weekly consumption level in EIA’s statistics dating back to the early 1990s. Including the most recent week to April 17, petroleum consumption in the U.S. in recent weeks has slumped by 31 percent compared to the average petroleum demand between January 1 and March 13, when the states started putting restrictions on travel.
Total petroleum demand in the U.S. consists primarily of motor gasoline (45 percent of the 2019 total), distillate fuel oil (20 percent), jet fuel (9 percent), and chemical feedstocks and other fuels (26 percent), as per EIA data.
Gasoline consumption has dropped the most in absolute terms, with product supplied having crashed by 40 percent to 5.3 million bpd as of the week ending April 17, from an average of 8.9 million bpd in 2020 through March 13.
Refiners in the United States have been cutting refinery runs over the past month. China is now processing more crude oil at its refineries than the world’s top oil consumer, the United States, according to data from OilX.
“We are seeing fast and furious gasoline demand destruction. The latest data reveals demand levels not seen since spring of 1968,” AAA spokesperson Jeanette Casselano said at the beginning of last week.
On Monday, AAA said that refinery rates dipped to 69 percent, a level not reported by the EIA in more than a decade.
While petroleum consumption declines in the pandemic, U.S. oil producers have already started to curtail some production as the oversupply persists, storage fills up fast, and oil prices plummet to unsustainable levels for the U.S. shale patch.
By Tsvetana Paraskova for Oilprice.com