US diesel demand to end year strong: EIA

Estimated US distillate consumption will this quarter surpass 4mn b/d for the first time since 2015, the Energy Information Administration (EIA) said today.

The agency revised its estimated distillate consumption for the fourth quarter higher by 40,000 b/d to 4.02mn b/d in its latest Short Term Energy Outlook. EIA last month estimated distillates consumption during the quarter would average 3.98mn b/d.

Increased consumption in November supported the climb, according to the agency. Distillates demand, which includes heating oil used in the US northeast, often rises in the winter. But rising consumption seen this year could be associated with manufacturing activity, rather than heating needs, the agency said. US manufacturing as measured by new orders, inventory levels and deliveries increased and temperatures were warmer than average.

The last quarterly average above 4mn b/d was in the first quarter of 2015, according to the EIA.

Gasoline consumption was estimated lower for the quarter by 80,000 b/d to 9.13mn b/d, compared to the November estimates. The drop would bring gasoline consumption estimated for 2016 to 9.31mn b/d, still a record annual rate topping the 9.29mn b/d recorded in 2007.