April’s crude oil inventory increase is a result of refinery runs falling more quickly than crude oil supply, which is determined by domestic production and imports. U.S. crude oil production in April averaged 12.1 million bpd, a decrease of 669,000 bpd (5%) from March. This decrease represents the largest month-over-month decline since September 2008, when Hurricanes Ike and Gustav hit the US Gulf Coast. U.S. crude oil imports fell by 776,000 bpd (12%) from March to April, further decreasing crude oil supply in the U.S.
The U.S. Energy Information Administration’s (EIA) latest Petroleum Supply Monthly shows the significant changes in petroleum markets that occurred in April, when most of the U.S. was under lockdown to limit the spread of coronavirus.
In April, commercial crude oil inventories increased by 46.7 million bbl (10%) – the largest monthly increase in EIA data going back to 1920. U.S. refineries operated at 70% of their capacity, the lowest utilisation rate in EIA’s monthly data series dating back to 1985. Demand for finished petroleum products fell to 11.7 million bpd, the lowest level since at least 1981.
The combined drop in production and imports was smaller than the decline in gross inputs to refineries, resulting in record increases in crude oil inventories. Based on estimates in EIA’s Weekly Petroleum Status Report, commercial crude oil inventories reached a record high of 541 million bbl in the week ending 19 June and have fallen slightly since then.
Meanwhile changes in travel patterns resulted in the lowest levels of U.S. demand for finished petroleum products (as measured by product supplied) in decades. Transportation fuels have been affected differently by changes in travel: demand for jet fuel and motor gasoline fell much more than distillate fuel, which is primarily consumed as diesel.
From March to April, product supplied of finished motor gasoline decreased a record 1.9 million bpd (25%) to 5.9 million bpd, the lowest monthly value since the mid-1970s.
U.S. demand for jet fuel fell by more than half in the space of two months, from 1.6 million bpd in February to 691,000 bpd in April. Before April, US jet fuel demand had not been less than 700,000 bpd since the mid-1970s.
Distillate demand fell by 408,000 bpd, (or about 10%), from March to April. Although the change in distillate demand was less drastic than the changes in motor gasoline and jet fuel demand, distillate consumption in April 2020 was the lowest in more than a decade.
For more information visit www.eia.gov
