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API: January Gasoline Demand Highest for Month since 1945
2/14 12:39 PM
API: January Gasoline Demand Highest for Month since 1945 OAKHURST, N.J. (DTN) -- The American Petroleum Institute reported consumer gasoline demand, as measured by total motor gasoline deliveries, averaged 8.9 million bpd for the month of January, 2.7% lower than the prior month but 1.9% more than January 2018 and the strongest for January since 1945. Demand for reformulated-type gasoline, which is consumed primarily in urban areas, increased 0.9% year-over-year to 2.9 million bpd in January. By contrast, conventional gasoline is used more in rural areas and rose 2.4% year-over-year to 6.0 million bpd. API data show January distillate deliveries were 4.2 million bpd, 2.4% higher than a month earlier but 3.3% lower than January 2018. About 96% of distillate demand in January was for ultra-low sulfur distillate, which was driven by road freight transportation activity. The Bureau of Labor Statistics' Producer Price Index for freight trucking increased by 8.0% year-over-year in January amid strong activity and a continued shortage of drivers. According to API, the remaining 4.0% of distillate demand was high sulfur distillate fuel, which is a heating fuel in the residential and commercial sectors and a marine fuel when blended to upgrade heavy fuel oil. In January, HSD deliveries tumbled by 30.8% versus the month prior and 17.4% versus those of January 2018. API said this was the lowest HSD demand on record for the month of January. U.S. petroleum demand, as measured by total petroleum deliveries, was 20.7 million bpd in January, down 0.2% from the month prior but up 1.1% from January 2018 and the strongest for the month since 2005. "Despite strong domestic demand, total U.S. petroleum inventories in January were 5.8% above their historical five-year average. Notably, however, U.S. petroleum exports decrease by 7.5 mb/d with lower exports of crude oil and refined products, which may be indicative of slowing global oil demand and economic growth," said API. U.S. crude oil production of 11.9 million bpd in January, again number one in the world, marked the highest monthly output on record. The increased production reflects the rise in drilling activity over the past quarter, which Baker Hughes reported an average of 878 oil-targeted rigs in fourth quarter 2018, up from 863 oil rigs in the third quarter 2018. The rig count slipped to an average of 866 in January, so further production growth may hinge on the extent to which the backlog of drilled but uncompleted wells begins to be drawn down. Energy Information Administration data show nearly 8,600 DUCs as of year-end 2018. Natural gas liquids production, a coproduct of natural gas production, was 4.8 million bpd in January, the highest on record for any month. U.S. refineries set new records for the month of January with throughput of 17.3 million bpd and refinery capacity utilization of 93.1%. Data show total petroleum inventories in January were 1.28 billion bbl, which was virtually unchanged from December but 5.7% over January 2018. Total inventories are now 5.8% above the average of the five-year range. Within the January total, crude oil inventories rose 1.4% month-over-month while refined product stocks declined 0.9%. (c) 2019 DTN. All rights reserved.