Eksplorasi.id – US petroleum demand, as measured by total domestic petroleum deliveries, decreased to 19.4 million b/d in March, according to the latest monthly statistical report from the American Petroleum Institute (API). Demand decreased 4.6% from February and 4.0% compared with March 2019—the lowest for the month of March since 2015.
The decrease in US petroleum demand reflected the escalation of measures to prevent transmission of the coronavirus (COVID-19). Fuel substitution was apparent with fewer deliveries of jet fuel (flying) and gasoline (driving by car), but more of diesel (freight transportation) versus February, according to the API report.
Consumer gasoline demand, measured by total motor gasoline deliveries, was 8.2 million b/d in March, decreases of 8.7% from February and 10.6% compared with March 2019. Meanwhile, average conventional gasoline prices fell by 8.1% from February or 20.4¢/gal according to AAA.
Distillate deliveries of 4.1 million b/d in March were up by 5.2% from February but down 1.3% compared with March 2019.The monthly increase appears to reflect the need for freight transportation as truckers have kept supply chains moving.
Kerosene jet fuel deliveries were1.4 million b/d in March, a decrease of 8.2% from February and 18.3% versus March 2019. Despite early April reports that 96% of passenger flights were canceled, jet fuel was only down 18.3% year-over-year in March, reflecting increased flight cancellations later in March and continued air freight transportation. As the International Air Transport Association (IATA) reported, however, North American air freight also bucked the global trend by rising 4.1% year-over-year in February even as the global air freight transportation fell by 4.4% year-over-year.
Deliveries of residual fuel oil, which is used in electric power production, space heating, industrial applications, and as a marine bunker fuel, were 144,000 b/d in March. This was a decrease of 33.9% from February and 33.6% compared with March 2019. The downshift in demand with the implementation of IMO 2020 regulations combined with slower economic activity to reach a record low.
Supply
For the 38th consecutive month, the US set a new year-on-year crude oil production record. However, last month marked the first monthly decline for March since before the US energy revolution in 2010. US crude oil production fell by 0.9% to 12.9 million b/d, which still was an increase of 8.4% year-over-year or 1.0 million b/d over March 2019. Additional NGL production of 5.0 million b/d was a record high for the month.
Production records were sustained despite less drilling activity in the current low-price environment. Baker Hughes reported oil-targeted drill rig activity has declined for 16 consecutive months and was down by 24.6% year-over-year in March.
Trade
US crude exports reached a monthly high of 3.5 million b/d, which contributed to record March total petroleum exports of 8.9 million b/d. Total exports decreased by 2.9% from February, but still were up by 12.1% compared with March 2019.
Meanwhile, US petroleum imports of 9.0 million b/d also fell between February and March, but by less than exports, thus the US returned to a net oil importer in March.
Refining
Lower March petroleum demand and prices led to decreased refinery activity. Gross inputs to crude oil distillation units at US refineries were 15.9 million b/d, which was the lowest for the month since 2015. This throughput implied a capacity utilization rate of 84.5%, which was down by 2.7% from February and 1.6% versus March 2019.
Inventories
US total petroleum inventories, including crude oil and refined products but excluding the Strategic Petroleum Reserve, held steady at 1.3 billion bbl in March, slightly above last year’s average and 5.2% below the maximum of the 5-year range. March inventories exceeded their year-ago levels for the 17th consecutive month and continued to build each week due to the COVID-19 crisis.
With lower total petroleum demand and refinery throughput, crude oil inventories of 470.4 million bbl in March rose 4.9% from February and 2.7% from March 2019 but were 12.7% below the maximum of the 5-year range (538.5 million bbl).
Sources : ogj.com
