Oil Demand

[dan_s]

Demand by Christian DeHaemer
Written Monday, April 10, 2017

Consumption is moving up. Unemployment came out at 4.5% — those people are driving to work.

Manufacturing is also up. And the amount of gasoline in storage has been dropping much faster than in recent years. It is now below the five-year average.

This, coupled with driving season, will pull down crude stores.

After a six-year slowdown, miles driven is back up. Furthermore, those miles are being driven by pickup trucks and SUVs, not econoboxes.

RCB did the math and put out this note over the weekend: "Refinery throughput so far this year has an average run rate of some 650 thousand barrels a day lower than levels seen this past December. Ultimately, softer refining margins and seasonal maintenance have contributed over 54 million barrels to storage so far this year. Simply put, if refiners had continued to run, throughout Q1, as hard as they did back in December, 54 mb of additional crude would have been consumed rather than stuffed into storage. Under that scenario, stock builds on a year to date basis would be minimal." Refiners are now ramping up production of transportation fuels and will be drawing much more oil from storage.