September 5, 2022

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EIA: US Oil Demand Looking Rosier

  • The EIA has revised demand up by 749,000 b/d in its latest end-of-month report.
  • US NGLs, now at a historic high, will see an increase in both production and demand in 2023.
  • Consumption of hydrocarbon liquids in first-half 2022 has approached 2019 levels.

US oil demand is improving and even approaching pre-pandemic levels. In the first six months of 2022, US oil consumption came in at 20.247 million barrels per day, which is 161,000 b/d below the same period in 2019, the latest data from the US Energy Information Administration (EIA) show. Despite higher oil prices, US demand in June rose to 20.772 million b/d, the highest so far thus, according to the EIA’s Petroleum Supply Monthly. The report, issued on Aug. 31, put US demand at a whopping 749,000 b/d higher than the influential weekly data.

Markets typically shrug off historic data as they are forward looking. Still, the June data shows that consumers were willing to stomach higher fuel prices after price shocks had slowed growth in April and even halted it altogether in May.

Energy Intelligence sees US demand at 20.81 million b/d in the second half of the year, which will bring full-year demand to just above pre-pandemic levels at 20.49 million b/d.

The more definitive monthly EIA data, which is based on surveys, revised upward weekly modeled estimates for all key fuels in June. Gasoline, diesel and jet fuel were all assessed higher in the monthly numbers versus weekly data — by 136,000 b/d, 174,000 b/d and 100,000 b/d, respectively.

After nine straight months of overcounting US demand in weekly data by an average 685,000 b/d, the EIA has now moved to the other end of the spectrum and undercounted demand for three months in a row. Average undercounting in weekly data for April, May and June was 625,000 b/d.

Boost From NGLs

The EIA expects that ethane production and consumption will continue to grow in 2022-23 as more ethane is pulled from the natural gas stream and piped to US steam crackers. These crackers make base ethylene, and more capacity has come on line in Texas and Pennsylvania. As long as ethane prices are above those for natural gas, operators will extract ethane from natural gas. The EIA calculates that the ethane premium over gas was $1.36 per million Btu in the first six months of 2022.

Ethane is the key component of natural gas liquids (NGLs), alongside propane and butane. NGL production continues to grow in tandem with rising natural gas volumes and has reached nearly 6 million b/d in June. If US NGL output would be a separate country, it would be the fourth biggest producer in the world — after the rest of US output, Saudi Arabia and Russia, but before Canada, China, Iraq, the United Arab Emirates or Iran.

EIA’s monthly report showed that total US liquids production (excluding refinery gains) in June rose to 19.1 million b/d and is close to peak levels prior to the pandemic.

Record Exports

Rising domestic production continues boosting exports of refined products and crude oil. Together they are closing in on the magical threshold of 10 million b/d, having posted a combined 9.88 million b/d in June.

Recent exports got a jolt from the release of 1 million b/d of crude oil from the strategic petroleum reserve, which will run for half a year through the end of October. This additional oil freed up some volumes for export, but it has particularly helped refiners to run at higher rates to reap majestic margins and export record volumes of refined products.

US exporters also selling down commercial and strategic inventories. Including June, US tanks have drained for 15 straight months for a total 276 million bbl, of which just half was crude oil from government stocks. The US government wants refiners to build more inventories at home ahead of winter.

US Crude Exports, June 2022
MonthlyMonthlyAvg.Avg.
('000 b/d)Jun'22Jun'2120212020
All Destinations3,5723,4142,9633,206
India695578420281
Netherlands390266286298
Korea355336349269
Canada347398311420
United Kingdom251227233247
China213728256481
Singapore183014391
Italy176124114140
Taiwan16449145158
Switzerland1520144
Spain118248663
France997310281
Germany937278101
Thailand741053776
Uruguay5401717
Dominican Republic36172510
Australia2501329
Norway2424386
Peru24241920
Denmark23243031
Ireland22403943
Brazil19295334
Colombia18181915
Nicaragua101299
Belgium1015
Lithuania04926
Other419520
US Petroleum Product Exports, June 2022
Total ProductsTotal ProductsNGLsNGLsMogasMogasJet KeroJet KeroDistillatesDistillatesResidsResidsPet CokePet CokeOtherOther
('000 b/d)Jun'22Jun'21Jun'22Jun'21Jun'22Jun'21Jun'22Jun'21Jun'22Jun'21Jun'22Jun'21Jun'22Jun'21Jun'22Jun'21
All Destinations6,3075,9512,6752,428970863176931,2531,257147127613535473648
Mexico1,0721,197192137492506404526937771437443674
Canada610543253295117332914121114332612159144
Japan3775613194360000000046601164
China475390384306000010000818311
Brazil39641910471524816013117100471004530
Indonesia104139103139000000000000
India2081341061240000900093505
Korea187337162246000000140001191
Chile313183706448101861618410160063
Peru1441103840314290480000721
Netherlands1951791392801001042091573093
Dominican Republic987944186221561926306651
Panama158142822319116778530286042
Guatemala989814144246113130009611
Ecuador9583333511100039360000121
Colombia11260403420400770006433
Honduras8068261118161323280091020
Costa Rica5359562020341727006023
Spain375519230000703083200
Egypt272501500000000271000
France65155100000700051223
Morocco7686516400000000252200
Singapore105128956206000600000101
El Salvador4049108202911811000000
United Kingdom15914443625020867400147100
Bahama Islands492821334029141190000
Other976641435252384426621812650181561195377
US Crude Oil Imports, June 2022
CanadaMexicoSaudi ArabiaIraqColombiaGuyanaBrazilGrand Total
('000 b/d)Jun '22Jun '21Jun '22Jun '21Jun '22Jun '21Jun '22Jun '21Jun '22Jun '21Jun '22Jun '21Jun '22Jun '21Jun '22Jun '21
Phillips 6642953358809277----17--1617----844885
Marathon465317643310--122------35--35--800374
BP468516----------------------29482564
Chevron1636142127130796475246527172748467537
PBF Energy8994504012755----1885985932434349
Exxon Mobil389473------------------------396482
Flint Hills327332------------------------327332
Saudi Aramco7385----242167----------------315269
Valero----155167----5079----21--21--311350
Cenovus Energy200227------------------------200227
PDV Midwest Refining175162------------------------175162
Houston Refining71153673--------6783--------173170
Hollyfrontier Refining & Marketing LLC155137------------------------155137
Monroe Energy----------------------------12798
Suncor109117------------------------109117
Top 152,9643,043505520602378235153125156157411411095,3155,052
Total Companies3,8144,016646681619436235180206176157411531096,4736,602
Total Imports3,6843,544772600412255234162275206469792316,4736,607
US Petroleum Product Imports, June 2022
CanadaSaudi ArabiaMexicoNetherlandsIndiaIraqSouth KoreaGrand Total
('000 b/d)Jun '22Jun '22Jun '22Jun '22Jun '22Jun '22Jun '22Jun '22Jun '22Jun '22Jun '22Jun '22Jun '22Jun '22Jun '22Jun '22
Motor Gasoline124124747488108108101101----88862862
Other Oils424274747676----66999966544544
Residual Fuel Oil1313191983831010------------231231
Middle Distillates98981515----------------44147147
Kerosene-Type Jet Fuel1010--------------------6666127127
LPG/Chemicals121121------------------------124124
Asphalt4747------------------------4949
Lubricants1010------------00---10104646
Petroleum Coke11------------------------99
Grand Total464464--183--167--118--107--99--942,1392,139
Total Companies464464183183118167118118107107999994942,1392,139
Total Imports465570183141167108118161107112----941372,1402,701
US Petroleum Product Imports, June 2022
CanadaSaudi ArabiaMexicoNetherlandsIndiaIraqSouth KoreaGrand Total
('000 b/d)Jun '22Jun '21Jun '22Jun '21Jun '22Jun '21Jun '22Jun '21Jun '22Jun '21Jun '22Jun '21Jun '22Jun '21Jun '22Jun '21
Valero512921373117--5--1751--5126295415
Exxon Mobil231355--21122721221148--48--289339
Irving Oil163210------------------------163210
Shell916--347-2938624--------139164
Chevron----982821-86--------6114129
BP--48--12----1011148------4111125
Phillips 663116--18----005------22101122
George E. Warren Corp----22--------33----------9637
Saudi Aramco----355----213------------8939
Atlantic Trading----15--8--71645------27283
Trafigura30--22----1013313--------55109
RIL USA----------------3724--------4026
PBF Energy--------2230----------------3482
Tartan Oil--3511----11212----------3122
Petrogas Energy3034------------------------3034
Top 152823641671291358111512010710799--99591,6601,936
Total Companies46456918314016710811816110711199--941372,1392,696
Total Imports465570183141167108118161107112--941372,1402,701

John van Schaik, New York