Of course, consumption picked up from the spring of 2020 and the excess inventory declined. This, however, came at the expense of significantly reduced refinery use and crude oil processing since oil prices and demand fell in March. Refiners are still processing crude at below normal levels, with US refinery utilization at just 80.7% in the week ending Jan. 1, up from 93% for the same week of the year previous, according to the EIA Weekly Oil Report shown last week.
This latest report showed a major crude oil draw of 8 million barrels, but a substantial inventory is building up in gasoline and middle distillates.
Yet excess stocks of all types have tended to decline in recent months and consumption of middle distillates such as diesel is back to its pre-crisis level, Reuters market analyst John Kemp written.
Over the past four weeks, the supplied fuel distillate product – the demand proxy – has averaged 3.7 million barrels per day (b / d), down just 0.3% from at the same time last year, according to the EIA report.
Related: India’s Oil Demand Falls For First Time In 20 Years Due To COVID
However, the most important component of oil demand in the United States – gasoline consumption – was still down by a double-digit percentage. Over the past four weeks, motor gasoline supplied revenue averaged 7.9 million bpd, down 11.8% from the same period last year, said the EIA.
This suggests that the latter part of the recovery in oil demand will be the most difficult, with the most recent data again pointing to a stall due to reduced travel amid measures to tackle the surge in COVID cases. 19.
In the week leading up to January 1, implied demand for gasoline in the United States fell to levels last seen in May 2020, according to Estimations Bloomberg EIA data on the supplied motor gasoline product.
There is no evidence of a substantial increase in gasoline demand anytime soon, and the still raging pandemic will continue to weigh on travel in the weeks to come, analysts told Bloomberg this week. last.
In 2020, vehicle travel to the United States fell to its lowest level in several years, with vehicle travel in April being the lowest on record since 2000, according to the OWN. Average gasoline prices also fell last year to the lowest annual average since 2016.
Highest US gasoline price at the end of December in nine months, but not because of the high demand.
“Despite weak demand, prices at the pump are more expensive because crude oil has seen steady gains,” AAA spokeswoman Jeanette Casselano McGee said.
U.S. gasoline demand was at its lowest level for the last week of December in 23 years (since 1998) – at 8.1 million bpd, with vacation travel down at least 25 %, AAA he told me last week. Starting Jan. 4, AAA expected gasoline demand to decline in the coming weeks as the holiday season ends.
This year, gasoline prices in the United States will rise from 2020, to an average of $ 2.44 per gallon, with a low point in January and a possible high point in July, according to GasBuddy’s Fuel Price Outlook. However, due to the pandemic, the margin of error is 19.8%, the highest level of uncertainty in the forecast since GasBuddy started forecasting in 2012.
“With the coronavirus in control, 2021 appears to be a very uncertain year for gasoline prices with a wide range of possibilities. Add to that President-elect Biden and the potential for a new policy to add to the equation, we could see gas prices come in 2020 like a lamb and go like a lion, ”said Patrick De Haan, responsible for petroleum analysis at GasBuddy.
The biggest unknown for U.S. gasoline and total oil demand, of course, will be the pandemic, how quickly vaccines are being rolled out and how quickly they would bring a return to normal, analysts including GasBuddy say.
At least in the early months of 2021, gasoline demand in the United States will struggle to reach pre-crisis levels.
By Tsvetana Paraskova for OilUSD
More Most Popular Readings From Oiluka: