US summer gasoline demand lagged pre-Covid levels
US gasoline demand ended the 2024 summer driving season well below pre Covid-19 pandemic norms and at the lower end of average post-Covid levels.
US summer driving season gasoline demand — measured from the last Monday in May to the first Monday in September — averaged 9.1mn b/d this year, according to US Energy Information Administration (EIA) weekly demand data released Wednesday. That is up by 49,000 b/d from the same period in 2023 and up by 291,000 b/d from 2022 but well below the 9.4mn b/d levels in the summer of 2021 when demand surged in the wake of the pandemic as the US economy reopened.
In the ten years prior to the pandemic, weekly US gasoline demand averaged 9.3mn b/d in the peak summer months (See chart).
Even as Americans drive more than ever, demand has failed to keep pace, likely due to increases in the efficiency of internal combustion engines and fully-electric vehicles (EVs) and hybrids comprising a greater portion of the automotive fleet.
The weekly EIA data released Wednesday is less accurate than the monthly numbers published by the agency at a lag, but those too have shown summer demand below pre-pandemic levels.
Gasoline demand was 9.1mn b/d in June, the most recent monthly data, down by 246,000 b/d from the same month last year and down by 583,000 b/d from June 2019.
Future outlook lowered
The agency has also downgraded its demand outlook in recent days. On Tuesday it lowered its demand, price and inventory expectations for road fuels such as gasoline in its monthly Short-Term Energy Outlook (STEO).
The agency revised down its expectations for gasoline demand in the second and third quarters of this year by 1.1pc and 0.4pc respectively to just over 9.1mn b/d. Demand in the second quarter of next year is expected to be 30,000 b/d higher than this year, but third quarter demand is expected to be 90,000 b/d lower, helping drive an overall 20,000 b/d gasoline demand decline next year.
Headed into the third quarter, US refiners have been cutting runs after weaker-than-expected summer gasoline demand raised inventories and narrowed margins. Refiners also take plants offline for maintenance in the fall amid seasonally narrower margins.
Access to the export markets could be a hedge against an uncertain domestic demand outlook, and several coastal refineries up for sale in North America could give a buyer access to global markets for the road fuel.
US refiners have steadily exported more gasoline since about 2007, sending 298mn bls overseas last year compared to 46mn bls in 2007.
Related news posts
Francine sets sights on Louisiana coast: Update
Francine sets sights on Louisiana coast: Update
Updates the status of ports in Texas. New York, 11 September (Argus) — Hurricane Francine, which has already shut in almost a quarter of the Gulf of Mexico's oil output, is set to strengthen before making landfall in Louisiana on Wednesday evening. Francine was about 150 miles southwest of Morgan City, Louisiana, according to an 10am ET advisory from the National Hurricane Center, with maximum sustained winds of 90 mph. The hurricane will bring 5-10 foot storm surge to coastal areas from Vermillion Bay to Port Fourchon, Louisiana, and after landfall is expected to move northward across Mississippi on Thursday and Thursday night bringing heavy rains. Ports along the hurricane's path announced traffic restrictions in advance, with some setting out plans to close until it passes, including the port of New Orleans . With the storm's track locked in toward Louisiana, the port of Houston was expected to reopen to inbound vessels at 1pm ET today and to outbound vessels at 3:30pm, a ship agent said. It closed to traffic at 1pm Tuesday. The ports of Beaumont, Port Arthur and Orange also plan to reopen Wednesday. About 412,070 b/d of offshore oil output was off line by midday on Tuesday, according to the Bureau of Safety and Environmental Enforcement (BSEE), as offshore operators including Chevron, Shell and ExxonMobil evacuated workers and curbed operations as a precaution. About 494mn cf/d of natural gas production, or 26pc of the region's output, was also off line. The Gulf of Mexico accounts for around 15pc of total US crude output and 5pc of US natural gas production. By Stephen Cunningham and Tray Swanson Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
Hurricane Francine sets sights on Louisiana coast
Hurricane Francine sets sights on Louisiana coast
New York, 11 September (Argus) — Hurricane Francine, which has already shut in almost a quarter of the Gulf of Mexico's oil output, is set to strengthen before making landfall in Louisiana on Wednesday evening. Francine was about 195 miles southwest of Morgan City, Louisiana, according to an 8am ET advisory from the National Hurricane Center, with maximum sustained winds of 90 mph. The hurricane is expected to become a category 2 storm, with winds between 96-110mph, and will bring 5-10 foot storm surge to coastal areas from Vermillion Bay to Port Fourchon, Louisiana. After landfall, the center is expected to move northward across Mississippi on Thursday and Thursday night bringing heavy rains. Ports along the hurricane's path announced traffic restrictions in advance, with some setting out plans to close until it passes, including the port of New Orleans . About 412,070 b/d of offshore oil output was off line by midday on Tuesday, according to the Bureau of Safety and Environmental Enforcement (BSEE), as offshore operators including Chevron, Shell and ExxonMobil evacuated workers and curbed operations as a precaution. About 494mn cf/d of natural gas production, or 26pc of the region's output, was also off line. The Gulf of Mexico accounts for around 15pc of total US crude output and 5pc of US natural gas production. By Stephen Cunningham Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
WMO puts likelihood of La Nina at 60pc from October
WMO puts likelihood of La Nina at 60pc from October
London, 11 September (Argus) — There is a 60pc chance of La Nina weather conditions emerging from October to February next year, the World Meteorological Organisation (WMO) said today. The chance of the El Nino pattern redeveloping during that time are "negligible", it said. La Nina generally leads to a cooling effect on a global level, while El Nino typically has the opposite effect. The weather patterns are naturally occurring, but "are taking place in the broader context of human-induced climate change" that is increasing temperatures globally, the WMO said. The past nine years have been the warmest on record, even with the cooling influence of a La Nina period from 2020 to early 2023, the organisation noted. "Even if a short-term cooling La Nina event does emerge, it will not change the long-term trajectory of rising global temperatures due to heat-trapping greenhouse gases in the atmosphere", WMO secretary-general Celeste Saulo said. Last month was the joint-hottest August on record , and was on average 1.51°C above pre-industrial levels. The Paris climate agreement seeks to limit global warming to "well below" 2°C above pre-industrial temperatures, and preferably to 1.5°C. Global temperatures have been at or close to record highs to date this year and it is "increasingly likely that 2024 is going to be the warmest year on record", EU earth-monitoring service Copernicus said last week. By Georgia Gratton Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
Pentas Flora launches re-refined Group II N150 base oil
Pentas Flora launches re-refined Group II N150 base oil
Singapore, 11 September (Argus) — Malaysia-based Pentas Flora launched its re-refined Group II N150 base oil grade today, in line with a shift in industry trends towards premium-grade base oils. The re-refiner started producing Group I SN 150 in 2022 but has converted production to Group II base oils with high-viscosity index from mid-August. The re-refiner also has the capability to produce Group III base oils depending on market demand. Its re-refining facility at Banting, Selangor has a capacity of up to 30,000 t/yr. Pentas Flora collects up to 40,000 t/yr of used motor oils from nine collection points, targeting to expand this to 28 collection points by 2026. Most Asian re-refined base oils (RRBO) produced are Group I grades. The transition from Group I to Group II and III RRBO has been dictated by what has been happening in the lubricant industry, which is moving towards using higher performing base oils, said Pentas Flora technical director H Ernest Henderson. "The industry wants to bring in oils that have better fuel economy, extended drain capabilities, reduce emissions and enhance fuel ability," Henderson said. "So over the years we have seen a shift from older performing standards to new performance standards. These are now demanding the use of higher VI and higher quality base oils." "And because re-refining basically takes engine motor oil and recaptures and re-establishes the original base oil within those formulation. The fact that we are now using higher performance motor oil using Group II and III… that in turn becomes feedstock which allows us to capture and produce higher quality base oil," he added. The shift driven by feedstock change is complemented by technology. Pentas Flora's re-refining processes involves distillation to separate the base oil components from the used motor oils, then purification using solvent extraction and lube polishing processes. Pentas Flora started with Group I RRBO initially because of sulphur content exceeding the Group II and III specifications. But with a lube polishing system installed in August it has been able to increase saturates and reduce sulphur content to meet Group II and III classifications. Lower carbon footprint RRBO has been gaining traction in recent years with governments around the world pushing for sustainability and a more circular economy. More companies are also placing more emphasis on environmental, social and governance objectives. So blenders are increasingly looking to include RRBO in finished lubricants. RRBO takes less energy to produce than virgin base oils, reduces carbon dioxide emissions and is therefore more environmentally friendly and sustainable, said Henderson. Pentas Flora is one of the few re-refiners in Malaysia, with China and India bigger markets for RRBO. India in April this year implemented the Extended Producer Responsibility for Used Oil regulation where producers of base oils and lubrication oils and importers of used oil have a recycling target of 5pc in 2024-25. This target will progressively increase to 50pc from 2030-31 onwards. By Chng Li Li Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
Business intelligence reports
Get concise, trustworthy and unbiased analysis of the latest trends and developments in oil and energy markets. These reports are specially created for decision makers who don’t have time to track markets day-by-day, minute-by-minute.
Learn more