US draws down fuel stockpiles

US implied gasoline demand fell last week by its largest volume since mid-May but national fuel inventories drained following a deep draw on US Gulf coast stockpiles, according to the Energy Information Administration.

Implied gasoline demand in the week ended 10 July fell by 1.3pc to 8.6mn b/d, 6.1pc lower than the same week of last year. Refiners have watched gasoline and especially distillate and jet fuel demand carefully to guide processing rates as communities eased restrictions imposed to limit the spread of the Covid-19 pandemic. Rising cases in key gasoline-consuming regions could stifle recovering crude demand.

Estimated weekly exports of gasoline increased by 15pc to 601,000 b/d, its highest level since late April and within 3pc of year-ago levels. National gasoline stockpiles fell by 1.3pc to 248.5mn bl, the lowest level since late March.

A 4.2pc draw on Gulf coast gasoline stockpiles to 87.7mn bl provided most of the decline. It was the largest weekly decrease since late January 2019. Regional stockpiles fell to within 5pc of year-ago levels.

US implied diesel demand increased by 22pc to 3.7mn b/d from the previous week, an average 4pc higher than the same week last year. Total diesel inventories were effectively flat at 176.8mn bl, but ultra-low sulphur diesel (ULSD) in storage fell by about 1pc to 162.7mn bl. US Gulf coast stockpiles fell by 2.1pc to 51.3mn bl, their lowest level since mid-March.

The rolling seven-day average of new confirmed Covid-19 cases increased in every region last week, led by Florida and the Atlantic coast. Texas, California and Florida — the top three states for gasoline consumption — have all seen new confirmed cases rise swiftly. California reimposed restrictions on indoor businesses and gatherings, and the Los Angeles school district said it would keep schools closed as the new school year approached, depressing outlooks for California fuel demand.

By Elliott Blackburn