U.S. Distillate Demand is Down
May 21, 2020
The basic outlook that production is lower, and demand is going up as lockdowns ease has continued to support this rally. The selloff that put in the lows in April was extreme and since those lows, ULSD has rallied $0.44 cents and RBOB has rallied $0.60 cents and technically crude oil has rallied over $60 dollars but let’s call it a more reasonable $25 dollars. The rebound has been strong and that makes it suspectable to some profit taking on the event of some bad news.
The DOE reported a larger draw than estimated in crude oil stocks with stocks down 4.982 million barrels putting total stocks at 526.494 million barrels which is 49.719 million more barrels than last year at this time. Cushing had a draw of 5.59 million barrels that largest weekly decline in history. Gasoline stocks in the DOE report were up 2.83 million barrels putting total gasoline stocks at 255.724 million barrels which is 26.984 million more barrels than las year at this time. Distillate stocks were up 3.831 million barrels putting total stocks at 158.832 million barrels which is 32.417 million more barrels than last year at this time. There is still a large amount of supplies that will need to be work off, but production has fallen drastically and as mentioned the optimism is high right now and supporting the markets.
Propane inventories were up 1.072 million barrels putting total stocks at 62.697 million barrels and last year at this time there were 34.83 million barrels a difference of 19.36 million barrels. Midwest inventories were up 694,000 barrels putting total stocks in the Midwest at 13.725 million barrels and last year at this time there were 13.327 million barrels a difference of +398,000 barrels. The Gulf Coast stocks for this reporting were down 251,000 barrels putting those stocks at 41.109 million barrels compared to last year at this time of 41.876 million barrels a difference of -767,000 compared to last year. Production was up 13,000 bpd but still below 2 million barrels per day at 1.945 million bpd. Total stocks are still above the three year average range and the Gulf and Midwest a right on last year and the high of the three year average range.
EIA reported on 05/20/20 that total U.S. gasoline product supplied (implied demand) fell by 608,000 bpd down to a total of 6.790 million bpd for the week ending May 15th.
U.S. gasoline implied demand is down by 29.1% over the past 4-weeks versus last year and down by 15.3% based upon a cumulative daily average versus last year.
EIA reported on 05/20/20 that total distillate product supplied (implied demand) fell by 150,000 bpd down to a total of 3.668 million bpd for the week ending May 15th.
U.S. distillate demand is now down by 13.8% over the past 4-weeks versus last year and down by 8.8% based upon a cumulative daily average versus last year. Distillate demand has not dropped as much as gasoline demand but includes jet fuel which has taken a large hit due to the virus.