Oil and Gas

US Oil Demand remains Sluggish

Total U.S. petroleum deliveries, a measure of demand, increased 2.8% in September versus the corresponding 2012 period to average 18.6 million bpd yet marked the second lowest rate of deliveries for the month since 2008, the American Petroleum Institute reported in its latest Monthly Statistical Report released Friday (10/18).
 
For the third quarter, total petroleum deliveries rose 1.7% from the same period last year. Year to date, total domestic petroleum deliveries gained 1.1% compared to the same period last year.
 
“Demand for petroleum products remains consistent with a gradually improving economy,” said API Chief Economist John Felmy. “Exports of refined products in particular continue to show strength over the previous year.”
 
Gasoline demand declined from the prior month but increased from the prior year, quarter and year to date. Total motor gasoline deliveries dropped 3.5% from August, but rose 2.1% from September 2012 to average 8.7 million bpd, which was the second lowest demand rate since 2008.
 
API said for the third quarter, gasoline deliveries increased 1.2% compared to the third quarter 2012. Year to date, gasoline deliveries edged up 0.3% compared with year to date of 2012.
 
The data showed distillate deliveries rose 3.8% in September compared with the same month last year to approximately 3.8 million bpd—again driven by increased ultra-low sulfur distillate deliveries. ULSD deliveries jumped 5.0% compared with September 2012 to 3.6 million bpd.
 
Demand for jet fuel in September totaled 1.4 million bpd, the second lowest level for the month in 20 years, since 1993. Demand for residual fuel tumbled 38.3% to 232,000 bpd, the lowest September level on record and just 36,000 bbl higher than the all-time low of 196,000 bpd set in December 2012.
 
Domestic crude oil production averaged above 7.0 million bpd for the 11th consecutive month in September, increasing from the month prior, prior year, prior quarter and prior year to date. U.S. crude oil production in September increased by 2.5% from August and soared 18.6% from September 2012 to nearly 7.8 million bpd—the highest output for the month in 25 years. Compared with the prior quarter and year to date 2012, domestic crude oil production rose by 18.7% and 16.3%, respectively.  
 
Natural gas liquids production, a co-product of natural gas production, was up from the prior month, the prior year, prior quarter and the prior year to date. At a record output level for the month, NGL production in September was nearly 2.6 million bpd, up 2.1% from last month and 4.0% from last year. Compared with the prior quarter and year to date 2012, NGL production rose 6.5% and 4.3%, respectively.
 
API reported U.S. total imports rose above 10.0 million bpd for the fifth time this year, averaging just over 10.0 million bpd in September but remained the lowest level for the month in 17 years. Total imports increased 2.1% from the prior month but decreased 4.4% from the prior year.
 
In September the data showed crude oil imports were seen above 8.0 million bpd for the third consecutive month to average around 8.1 million bpd. Though the highest imports level in nearly a year, this was the lowest import level for the month in 17 years, since 1996. Crude oil imports climbed 0.7% from August but fell 3.3% from September 2012.
 
Imports of refined products in September jumped 8.2% from August but dropped 8.8% from September 2012 to average 1.9 million bpd—the lowest level for the month in 16 years.
 
Refinery gross inputs in September were above 16.0 million bpd for the fourth month in a row. API reported refinery gross inputs declined 0.5% from the month prior but rose 6.2% from the year prior to nearly 16.2 million bpd—the highest level for the month on record. Production of all four major products—gasoline, distillate, jet fuel and residual fuels, remained higher than deliveries for those products so refined products were exported. Exports of refined petroleum products rose 4.3% on the month and jumped 15.5% from September 2012 to average nearly 3.7 million bpd in September—the second highest level ever.
 
For the fifth consecutive month, gasoline production remained above 9.0 million bpd and was up from the prior year, prior quarter and prior year to date but down from the month prior. Data indicated gasoline output declined 1.8% from August but rose 1.9% from September 2012 to 9.1 million bpd—the third highest output for the month on record. For the quarter and year to date, gasoline production increased 1.3% and 2.3%—the highest September year to date on record—compared with the same period last year, respectively.
 
The data showed distillate fuel production fell 2.1% from August but jumped 8.1% from last year to reach a record level for the month of 4.9 million bpd. This was the second highest output level on record, just 104,000 bbl below last month’s all-time high of 5.0 million bpd. For the third quarter and year to date, distillate production increased 7.8% and 3.5%—the highest September year to date on record—compared with the same period last year, respectively.
 
The refinery capacity utilization rate averaged above 90.0% for the fourth month in a row in September. At 90.8%, utilization dipped 0.5% from the month prior but rose 3.2% from the same period last year. API’s latest refinery operable capacity was 17.820 million bpd, up 2.4% from last year’s capacity of 17.400 million bpd.
 
API reported crude oil stocks ended September at 365.3 million bbl—the second highest inventory level for the month in 33 years, since 1980. Crude stocks were up 1.0% from the prior month, but were down 1.3% from the prior year. Stocks of motor gasoline ended the month at 219.5 million bbl, an increase of 0.6% from a month ago and up 9.3% from September 2012. Distillate fuel oil stocks ended the month profiled at 128.2 million bbl, down 1.0% from a month ago but up 0.6% versus a year ago. Jet fuel stockpiles rose 4.1% from the prior month but dropped 7.3% on the year. Stocks of “other oils” were down from year ago and month ago levels, API reported. Total inventories of all oils declined 1.5% from a month ago and 1.2% on the year.

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