US summer gasoline demand lagged pre-Covid levels

: Crude oil, Oil products
24/09/11

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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24/10/08

Florida retail gasoline supplies tighten ahead of storm

Houston, 8 October (Argus) — Florida officials are dispatching previously stockpiled fuel to retail stations throughout the state as hundreds of thousands of residents flee the western coast ahead of Hurricane Milton. Florida had more than 110,000 USG of gasoline and 268,000 USG of diesel on hand ahead of the storm and another 1.2mn USG of both en route to the state, governor Ron DeSantis (R) said today. The state has been dispatching those reserves to gas stations that have run out of fuel as residents evacuate coastal areas ahead of Milton, which is expected to come ashore late Wednesday near Tampa as a major storm. The Florida Highway Patrol late Monday escorted 27 fuel trucks to fuel stations in the anticipated path of Milton, and the state is working with fuel sellers Racetrac, Wawa, Shell and Walmart to maintain supplies, DeSantis said. Panic buying in southwest Florida led some gas stations to run out of fuel as early as Monday, according to a wholesaler operating in the region. Florida is the third largest US state by both population and gasoline demand, consuming about 600,000 b/d in 2022, according the US Energy Information Administration. The stockpiles and additional supply en route DeSantis outlined would be equal to about about 31,000 bls, or 5pc of daily demand. Despite the need to dispatch the fuel DeSantis insists "there is no fuel shortage … fuel continues to arrive in the state of Florida," but lines at gas stations are long and demand is depleting reserves faster than normal. Florida has no refineries and imports all its gasoline, diesel and jet fuel by truck and ship, meaning it can face significant disruption if ports and roadways are closed by a storm. Florida's fuels infrastructure was quick to recover last year in the aftermath of category 3 Hurricane Idalia, but this year's storm looks set to bring greater damage. Bigger fuel issues ahead for Tampa "We are assuming … that there is going to be significant damage to the port of Tampa," affecting the port's ability to receive fuel shipments after Milton passes through, DeSantis said today. Ports on Florida's Gulf coast from Tampa to Fort Myers Beach closed at 8am ET today ahead of the expected landfall. Kinder Morgan is planning to shut its terminals and fuel racks in Tampa today. Kinder's Tampa refined products terminal has 1.8mn bls of storage and is connected to the Central Florida Pipeline (CFPL) which transports gasoline, diesel, ethanol and jet fuel to Orlando, including to Orlando International Airport. The airport said today that it will cease operations the morning of 9 October. Citgo is also shutting down its Tampa fuels terminal, the company said early today. The terminal imports waterborne ultra low sulfur diesel and gasoline. ExxonMobil said it is closely monitoring the situation and its Ft Lauderdale terminal on the Atlantic coast side of the state and south of the expected hurricane landfall zone is operating as normal. Hillsborough County issued a mandatory evacuation order Monday for coastal residents along Tampa Bay. Much of Pinellas County on the western side of the Tampa Bay is also under a mandatory evacuation order. By Nathan Risser Hurricane Milton projected path Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

September was second hottest: EU's Copernicus

24/10/08

September was second hottest: EU's Copernicus

London, 8 October (Argus) — Last month was the second hottest September on record globally, after September 2023, with average temperatures 0.73°C higher than the 1991-2020 average for the month, according to data from the EU climate-monitoring service Copernicus. Last month's average temperatures globally were 1.54°C above pre-industrial (1850-1900) levels and September's average was the 14th month in a 15-month period when the global average surface air temperature was more than 1.5°C above pre-industrial levels. The global average temperature for the 12 months to September was the second highest on record for any 12-month period — 0.74°C above the 1991-2020 average, and an estimated 1.62°C above the 1850-1900 pre-industrial average. The January–September 2024 global-average temperature was 0.71°C above the 1991-2020 average, the highest on record for the period and 0.19°C warmer than the same period in 2023. It is almost certain that 2024 will turn out to be the warmest year on record, Copernicus said. The average temperature over European land for September 2024 was 1.74°C above the 1991-2020 average for September, making it the second warmest September on record for Europe after September 2023, which was 2.51°C above average. Last month also had exceptionally high rainfall levels across much of the continent, with widespread floods across central Europe. Last year was the hottest on record , averaging 1.45°C above pre-industrial temperatures. By Gavin Attridge Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

Kinder Morgan to shut Tampa terminals Tuesday

24/10/07

Kinder Morgan to shut Tampa terminals Tuesday

Houston, 7 October (Argus) — Kinder Morgan is planning to shut its terminals and fuel racks in Tampa, Florida, on Tuesday as the region prepares for Hurricane Milton to make landfall Wednesday evening . "We will continue to monitor the storm's path and make any adjustments as needed," Kinder Morgan said in a statement on Monday. Kinder operates the Port Sutton, Tampa Bay Stevedores and Tampaplex terminals in Tampa's Hillsborough Bay and the Port Manatee terminal further south in the Tampa Bay. The terminals handle a wide range of bulk products including fertilizers, scrap metal, petroleum coke and coal according to Kinder Morgan's website. Kinder's Tampa refined products terminal has 1.8mn bls of storage and is connected to the Central Florida Pipeline (CFPL) which transports gasoline, diesel, ethanol and jet fuel to Orlando, including to Orlando International Airport. The airport said today that it will cease operations the morning of 9 October in advance of the hurricane. By Nathan Risser Hurricane Milton projected path Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

CNRL to buy Chevron's Canadian oil sands, shale: Update

24/10/07

CNRL to buy Chevron's Canadian oil sands, shale: Update

New York, 7 October (Argus) — Canadian Natural Resources (CNRL) agreed to buy a 20pc stake in the Athabasca Oil Sands Project (AOSP) and 70pc interest in the Duvernay shale from Chevron for $6.5bn, extending its lead as Canada's top producer. The all-cash transaction has an effective date retroactive to 1 September, the companies said Monday. Closing is expected during the fourth quarter. The assets being sold accounted for about 84,000 b/d of oil equivalent (boe/d) of production, net of royalties, to Chevron last year. Chevron last October announced plans to acquire US independent Hess for $53bn, pledging to sell $10bn-$15bn of assets by 2028. While the Hess deal has been delayed by a mid-2025 arbitration hearing, Chevron, the second-largest US oil producer, has increasingly focused its attention on the Permian shale basin of west Texas and southeastern New Mexico, as well as an expansion project in Kazakhstan. CNRL's acquisition bolsters its position as Canada's largest petroleum producer after pumping out 1.29mn boe/d of oil and gas in the second quarter this year. About 72pc came from oil and natural gas liquids (NGLs), with the balance from natural gas. CNRL anticipates the oil sands and Duvernay assets will lift the company's production profile by about 122,500 boe/d in 2025. About half, or 62,500 b/d, will come in the form of synthetic crude oil produced from AOSP's 320,000 b/d Scotford upgrader near Edmonton, Alberta. The upgrader is fed diluted bitumen piped from the Muskeg River and Jackpine mines in the oil sands region. The deal would increase CNRL's stake in AOSP to 90pc. Calgary-based CNRL first made its foray into AOSP in 2017 when it bought a 70pc stake from Shell and Marathon Oil Canada for $9.75bn ($C$12.74bn). Muskeg River and Jackpine are adjacent to the company's fully owned Horizon mine and upgrader, and the increase in ownership may allow for increased synergies between the two assets, according to executives. "It allows for a little bit more ease in terms of governance on the asset," CNRL president Scott Stauth said Monday on an investor call. "I can see us utilizing the equipment more effectively between the two sites." Undeveloped oil sands projects Also included in Monday's deal are additional stakes in undeveloped oil sands leases that CNRL could tap as it works through its reserves. This includes a 20pc increase the Pierre River project that would provide CNRL with 90pc ownership; a 60pc increase in the Ells River project that would lift the company's stake to 90pc; a 33pc increase in the Saleski project, for 83pc; and a 6pc working interest in Namur that would reach 65pc. Reserves from Pierre River could be used to extend the life of the Horizon project as the North Mine depletes. A standalone facility there is also possible, but would require a significant capital outlay, CNRL executives said. CNRL in May said it was considering a massive 195,000 b/d increase to its Horizon production using two new technologies. CNRL said production from the light oil and liquids rich assets in the Duvernay is expected to average 60,000 boe/d in 2025, half of which would be natural gas. CNRL anticipates pushing production to 70,000 boe/d by 2027 with more than 340 locations already identified as candidates for drilling. With WTI above $70/bl, "this is a very attractive acquisition for us," CNRL chief financial officer Mark Stainthorpe said. CNRL has been actively acquiring assets in recent years. The company purchased Canadian assets belonging to Painted Pony in 2020, Devon Energy in 2019, TotalEnergies in 2018 and Cenovus Energy in 2017, among other deals. By Stephen Cunningham and Brett Holmes Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

Trump, Harris run on competing visions for energy

24/10/07

Trump, Harris run on competing visions for energy

Washington, 7 October (Argus) — Energy has emerged as a centrepiece in the US presidential race between Republican candidate former president Donald Trump and Democratic candidate vice-president Kamala Harris, who have repeatedly fought over whose policies would keep domestic energy prices affordable now and in the future. Trump has promised a return to the policies he championed during his first presidential term, when he opened vast tracts of federal land to oil and gas leasing, scrapped rules that would support electric vehicles (EVs), and halted any serious attempts for the federal government to respond to climate change. Trump has embraced "drill, baby, drill" as a core policy plank, which he argues will be an elixir to voters frustrated with inflation and high prices. Vice-president Harris backs an "all-of-the-above" energy policy, her running mate Tim Walz says, and has a further goal to turn the US into a global powerhouse for the types of clean energy manufacturing and EVs that will be needed to make a difference on climate change. But Harris' remark in 2019 that there is "no question I'm in favour of banning fracking" has come to haunt her campaign, despite saying she has dropped that position. Harris says her experience serving as vice-president has shown her that banning fracking was not needed to support a clean energy economy. "As vice-president, I did not ban fracking. As president, I will not ban fracking," she says. Even so, Trump has tried to sow doubts among voters that Harris is sincere in her new position, which he hopes will cost her in the battleground state of Pennsylvania, a key shale gas producer that accounts for 20pc of US natural gas output. "If she won the election, the day after that election, they'll go back to destroying our country and oil will be dead," Trump says. But Trump's promises on oil and gas — and his attacks on the policies of the Biden-Harris administration — have at times borne little resemblance to reality. Trump claims that if he had won a second term in 2020, oil production would be "four times, five times higher", translating into US crude production in excess of 50mn b/d, or more than half of global production. Trump also says that, if elected, he would cut the price of energy "in half or more within a year of taking office", double electricity production and bring gasoline prices below $2/USG. He will do this through "a national emergency declaration" that will cause a "massive increase" in energy supply, Trump says, although energy analysts say his promises are technically and economically unachievable. Trump's oft-repeated claim that US oil and gas production crashed after he left office is also undercut by basic energy statistics, as is his claim that the US has lost the "energy dominance" it had during his term. The US hit record-high production this year, in excess of 13mn b/d of crude and 100bn ft³/d (1 trillion m³/yr) of gas, while US net petroleum exports climbed to a record high of 1.7mn b/d last year. Regulatory rollback Trump has campaigned heavily on rolling back regulations and cutting energy prices, which he says will persuade manufacturers to "pack up and move their production to America". For every new regulation, he promises to remove "10 old and burdensome regulations from the books", echoing an earlier "two-for-one" regulatory repeal policy he attempted to enforce during his first term in office. Trump has shown particular zeal for eliminating policies he sees as part of the "Green New Scam", a blanket term he uses for clean energy spending under President Joe Biden's signature climate legislation, the Inflation Reduction Act, and climate-related regulations. If Trump's first term serves as a guide, he will again seek to repeal regulations that restrict methane emissions from US oil and gas production, weaken CO2 emission limits for power plants and block tailpipe rules that encourage EVs. "I will end the insane EV mandates," Trump says. Faster permitting will be another top priority, Trump says, after his efforts to pass comprehensive permitting legislation collapsed during his first term. A Harris victory, in contrast, would be key to implementing dozens of climate-related regulations issued under the Biden administration and defending them in court. Expediting federal permitting and "cutting red tape" will also be a priority for a Harris administration, given the impediments it can create for clean energy projects and other infrastructure, according to campaign documents. "No-one can tell me we can't build quickly," Harris says. Federal oil and gas leasing has plunged under Biden, who was unable to carry out campaign promises to ban new leasing but was still able to limit onshore lease sales to 210,000 acres/yr (850 km²/yr) in 2022-23, down from more than 6mn acres/yr in 2018-19 under Trump. Oil and gas groups say expanded federal leasing, particularly in the US Gulf of Mexico, is a top policy priority. Trump has vowed to expand federal oil and gas development if he wins, particularly by enabling drilling in Alaska's Arctic National Wildlife Refuge (ANWR), which he opened to leasing in 2017 but has been held up in reviews since Biden took office. "I'll put ANWR back in play," Trump says. Less clear is how Trump would handle offshore leasing, an issue that backfired in his first term when his push for drilling offshore Florida prompted fury from political leaders in the Republican-led state. Harris has yet to explicitly embrace federal drilling, but she has touted the "record energy production" the US has achieved under the Biden-Harris administration, and supports further growth "so that we never again have to rely on foreign oil", according to campaign documents. A recent bipartisan bill from US senator Joe Manchin suggests there is flexibility from the Democrats on the issue, by offering more federal oil leasing in exchange for fast-tracking electric transmission development. LNG pause in balance Biden's decision earlier this year to pause the licensing of newly-built LNG export terminals has fuelled uncertainty for projects such as Venture Global's 28mn t/yr CP2 project in Louisiana. But the pause is only set to last until early 2025, when the US Department of Energy (DOE) will finish work on a study into whether further exports are in the "public interest" based on factors such as climate change and domestic energy prices. Trump says as soon as he takes office he will approve pending LNG export terminals, which he says are "good for the environment, not bad, and good for our country". Harris has yet to describe her approach to licensing more LNG terminals, the approval of which environmental activists say would be a "climate bomb". But Manchin's permitting bill suggests there is some room for manoeuvre, by requiring the DOE to decide on LNG export licences within 90 days. Oil industry officials are preparing for a fight to retain the existing corporate tax rate of 21pc enacted under Trump in 2017, as Congress is heading towards a "tax cliff" at the end of 2025 that will cost more than $4 trillion to avert. Harris has called for Congress to raise the corporate tax rate to 28pc, but wants new tax credits for industries such as manufacturing. Trump has proposed a lower corporate tax rate of 15pc only "for those who make their product in America". At the same time, Trump's push for an across-the-board import tariff of up to 20pc has alarmed industry officials, who say such a policy would raise consumer prices and potentially trigger a disruptive trade war. By Chris Knight Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

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