US summer gasoline demand lagged pre-Covid levels

Spanish Market: Crude oil, Oil products
11/09/24

US gasoline demand ended the 2024 summer driving season well below pre Covid-19 pandemic norms and at the lower end of average post-Covid levels.

US summer driving season gasoline demand — measured from the last Monday in May to the first Monday in September — averaged 9.1mn b/d this year, according to US Energy Information Administration (EIA) weekly demand data released Wednesday. That is up by 49,000 b/d from the same period in 2023 and up by 291,000 b/d from 2022 but well below the 9.4mn b/d levels in the summer of 2021 when demand surged in the wake of the pandemic as the US economy reopened.

In the ten years prior to the pandemic, weekly US gasoline demand averaged 9.3mn b/d in the peak summer months (See chart).

Even as Americans drive more than ever, demand has failed to keep pace, likely due to increases in the efficiency of internal combustion engines and fully-electric vehicles (EVs) and hybrids comprising a greater portion of the automotive fleet.

The weekly EIA data released Wednesday is less accurate than the monthly numbers published by the agency at a lag, but those too have shown summer demand below pre-pandemic levels.

Gasoline demand was 9.1mn b/d in June, the most recent monthly data, down by 246,000 b/d from the same month last year and down by 583,000 b/d from June 2019.

Future outlook lowered

The agency has also downgraded its demand outlook in recent days. On Tuesday it lowered its demand, price and inventory expectations for road fuels such as gasoline in its monthly Short-Term Energy Outlook (STEO).

The agency revised down its expectations for gasoline demand in the second and third quarters of this year by 1.1pc and 0.4pc respectively to just over 9.1mn b/d. Demand in the second quarter of next year is expected to be 30,000 b/d higher than this year, but third quarter demand is expected to be 90,000 b/d lower, helping drive an overall 20,000 b/d gasoline demand decline next year.

Headed into the third quarter, US refiners have been cutting runs after weaker-than-expected summer gasoline demand raised inventories and narrowed margins. Refiners also take plants offline for maintenance in the fall amid seasonally narrower margins.

Access to the export markets could be a hedge against an uncertain domestic demand outlook, and several coastal refineries up for sale in North America could give a buyer access to global markets for the road fuel.

US refiners have steadily exported more gasoline since about 2007, sending 298mn bls overseas last year compared to 46mn bls in 2007.

By Nathan Risser

US summer driving season gasoline demand ’000 b/d

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