Data Indicate Continuing U.S. Demand Recovery
Posted November 19, 2020
While the International Energy Agency and OPEC recently lowered their expectations for global oil demand for this year and the next, the United States has continued to make measured progress, according to API’s latest primary data.
In October, U.S. petroleum markets reflected a U.S. economic recovery in progress. Demand increased broadly among fuels – diesel, jet fuel, other oils and gasoline among urban areas.
While these offer solid indications of domestic activity, international trade – particularly the pull for U.S. refined products – picked up in October. Moreover, the U.S. Energy Information Administration (EIA) projects record high U.S. exports of liquefied natural gas (LNG) in November.
So, although external expectations may have been tempered, the global news for the economy, oil and natural gas isn’t all bad.
For U.S. energy security, it’s notable that U.S. crude oil imports fell in October to their lowest level since 1990 and made the U.S. a net exporter of total petroleum for the fourth consecutive month – that is, exports of crude oil and refined products exceeded imports of the same.
These factors ultimately matter to U.S. jobs and the health of the economy and the petroleum industry, which has gone through a rough patch so far in 2020.
In fact, API’s economic indicator – The D-E-I™ (Distillate/Diesel Economic Indicator) – continued to signal a recovery in U.S. industrial production and economic growth in October.
And although the 2020 COVID-19 recession cost the U.S. some of its market share in global oil markets this year, the supply of crude oil and natural gas liquids (NGLs) stood relatively strong despite historically low drilling activity. In fact, NGLs reached a record high output for the month of October.
For discussion and details about these developments, please see API’s latest Monthly Statistical Report (MSR).
- Refining and petrochemical demand for naphtha and gasoil – plus notable increases for diesel and jet fuel – led a continued rebound in petroleum demand to 18.8 million barrels per day (mb/d).
- Despite drilling activity of about 70% below year-ago levels, U.S. crude oil production was 10.7 mb/d, and NGLs production set a record high for the month of October.
- Refinery throughput (13.9 mb/d, 74.9% capacity utilization) slipped with hurricane disruptions.
- The lowest crude oil imports since 1990 propelled U.S. petroleum net exports for a 4th consecutive month.
- Total petroleum inventories receded from record levels.
About The Author
Dr. R. Dean Foreman is API’s chief economist, specializing in energy and global business. With a Ph.D. in economics from the University of Florida, he came to API from Saudi Aramco Strategy & Market Analysis in Dhahran, where he managed short-term market monitoring and the long-term oil demand outlook. Foreman has more than 20 years of industry experience in corporate strategic planning, forecasting, finance / risk management and regulatory policy at ExxonMobil, Talisman Energy and Sasol North America.
- MSR: Reading Between the Lines on Energy Recovery
- MSR: Markets are Rebalancing, Though Uncertain Road Lies Ahead
- Continued Progress Seen in Petroleum Demand
- Global Economic Recovery and Oil Markets in Context
- U.S. Petroleum Markets – July Progress and a Potential Turning Point
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