Wednesday, June 24, 2020
According to data released June 18 in the American Petroleum Institute’s May 2020 Monthly Statistical Report (MSR) and Q2 2020 Industry Outlook, the gradual reopening of state economies fueled a notable rebound in U.S. energy markets in the month of May. U.S. petroleum demand increased 14% to 16.2 MMbbld. Motor gasoline accounted for more than 80% of the increase in demand with monthly deliveries surging nearly 29% to 7.3 MMbbld after reaching a multi-decade low in April. Demand for distillate fuel and liquid feedstocks also notched monthly increases, while jet fuel posted its fifth consecutive monthly decline and reached its lowest level since 1967.
“The underlying market fundamentals still appear constructive and should position the U.S. natural gas and oil industry to play an important role in the recovery of the global economy,” API chief economist Dean Foreman said. “Market forces are in the midst of driving an unprecedented realignment of oil markets despite significant uncertainty around the rate of recovery and longevity of the pandemic. The uptick in demand associated with the gradual reopening of state economies leads us to be cautiously optimistic that the worst may be behind us.”
On the supply side, reduced drilling activity led to a 600,000 bbld decrease in U.S. crude oil production, which averaged 11.4 MMbbld in May. By contrast, U.S. natural gas liquids production held relatively steady at 4.8 MMbbld, down 0.8% percent from the month prior. These production decreases correspond with a record decline in U.S. drilling activity, which has tumbled 70% year to date in response to the unprecedented and abrupt decline in demand.
Read the full May 2020 Monthly Statistical Report https://www.api.org/~/media/Files/News/2020/06/Monthly_Statistical_Report_May_2020.pdf and the Q2 2020 Industry Outlook https://www.api.org/~/media/Files/Statistics/API-Industry-Outlook-Q2-2020.pdf
SOURCE: The Weekly Propane Newsletter, June 25, 2020. Weekly Propane Newsletter subscribers receive all the latest posted and spot prices from major terminals and refineries around the U.S. delivered to inboxes every week. Receive a center spread of posted prices with hundreds of postings updated each week, along with market analysis, insightful commentary, and much more not found elsewhere.
“The underlying market fundamentals still appear constructive and should position the U.S. natural gas and oil industry to play an important role in the recovery of the global economy,” API chief economist Dean Foreman said. “Market forces are in the midst of driving an unprecedented realignment of oil markets despite significant uncertainty around the rate of recovery and longevity of the pandemic. The uptick in demand associated with the gradual reopening of state economies leads us to be cautiously optimistic that the worst may be behind us.”
On the supply side, reduced drilling activity led to a 600,000 bbld decrease in U.S. crude oil production, which averaged 11.4 MMbbld in May. By contrast, U.S. natural gas liquids production held relatively steady at 4.8 MMbbld, down 0.8% percent from the month prior. These production decreases correspond with a record decline in U.S. drilling activity, which has tumbled 70% year to date in response to the unprecedented and abrupt decline in demand.
Read the full May 2020 Monthly Statistical Report https://www.api.org/~/media/Files/News/2020/06/Monthly_Statistical_Report_May_2020.pdf and the Q2 2020 Industry Outlook https://www.api.org/~/media/Files/Statistics/API-Industry-Outlook-Q2-2020.pdf
SOURCE: The Weekly Propane Newsletter, June 25, 2020. Weekly Propane Newsletter subscribers receive all the latest posted and spot prices from major terminals and refineries around the U.S. delivered to inboxes every week. Receive a center spread of posted prices with hundreds of postings updated each week, along with market analysis, insightful commentary, and much more not found elsewhere.
