US road fuel demand falters: Update

Adds Atlantic coast and travel data detail.

US implied fuel demand tumbled last week and fuel stockpiles rose, a sharp reversal of consumption that earlier this month lifted hopes for fuel demand.

Implied gasoline demand fell by 8.2pc to 6.8mn b/d in the week ended 15 May, according to the Energy Information Administration (EIA). Consumption sank to 28pc lower than year-ago levels and 25pc below the five-year average for the week, even as more states loosened travel and business restrictions imposed to limit the spread of the Covid-19 pandemic.

Implied diesel demand fell by 3.9pc to 3.7mn b/d, 3.1pc lower than the same week last year.

Weekly EIA data offers only volatile estimates of consumption, and will be revised weeks from now to more exact monthly data. But the snapshot could temper optimism earlier this month of recovering fuel demand heading into the traditional US driving season.

US gasoline inventories increased by 1.1pc to 255.7mn bl, their highest level since the beginning of May and the largest weekly rise in about a month. The US Gulf coast led the build with a 2.2pc increase to 90.3mn bl, the largest stockpile volume there since mid-February. Inventories were 8.5pc higher than the five-year average for the week, and 14pc higher for conventional gasoline blendstock stockpiles, which increased by 4.4pc to 38.5mn bl. Gasoline inventories increased by some volume in every region but the Rockies, where inventories fell by 2.8pc to 7.8mn bl.

Commuting levels remain low

Trips for retail and recreation activities have increased in every region through the first half of May, according to the latest aggregated Google Community Mobility data. The Gulf coast led all regions in that rise. Alabama, Mississippi and Arkansas — relatively small gasoline markets — matched or exceeded year-ago trips by 13 May as governments eased limitations. Texas, the state with the largest gasoline consumption, was within 10pc of year-ago activity over the same period.

Retail and recreation trips in California and Florida, the second and third largest gasoline markets, remained lower by 22pc and 39pc, respectively.

But trips to workplaces remain substantially lower than 2019 across the United States. Commutes in the five states with the largest gasoline consumption — Texas, California, Florida, New York and Ohio — all remained at least 25pc lower than year-ago levels. Such travel remained lower by about 40pc in California and New York.

US gasoline production adjusted for ethanol blending increased by 1.8pc to 7.2mn b/d in the week ended 15 May. The Atlantic coast led the rise by volume, higher by 2.6pc to 2.3mn b/d. Imports to the region also climbed, higher by 24pc to 440,000 b/d. Total US imports increased by 8.2pc to 526,000 b/d.

Estimated US gasoline exports increased from the previous week by 40pc to 244,000 b/d, still 41pc lower than the same week last year.

Diesel stocks rise

US diesel stockpiles increased by 2.5pc to 158.8mn bl, their highest volume since early March 2017. Ultra-low sulphur diesel in storage increased by 2.8pc to 145.9mn bl, the highest volume since February 2017. Estimated weekly diesel exports increased by 19pc from the previous week to 911,000 b/d, 35pc lower than the same week last year.

Atlantic coast diesel inventories reported the largest build of any region. ULSD increased by 4.3pc to 49.6mn bl, the highest volume since March 2017 and 31pc larger than the five-year average for the week. Lower Atlantic coast ULSD stockpiles fell by 7.9pc from the previous week to 13.6mn bl. But the Central Atlantic region including New York, New Jersey and Pennsylvania increased by 12.3pc to 26.5mn bl, the area's largest stockpile since December 2017.

National ULSD production fell by 1.8pc from the previous week, to 4.6mn b/d. Output was 1.7pc lower than the five-year average for the week. Production fell in every region but the midcontinent, where output increased by 3.6pc to 1.2mn b/d.

Crude throughputs at US refineries increased by 4.2pc to 12.9mn b/d, still 22pc lower than the same week of 2019. Atlantic coast refineries increased processing by 8.4pc, to 609,000 b/d.

By Elliott Blackburn