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API report: Petroleum demand and deliveries both rose in February

screen-shot-2017-03-23-at-12-24-59-pmTotal petroleum deliveries in February were the highest for the month in nine years, since 2008, according to the newest Monthly Statistical Report from API. These deliveries moved up by 0.1% from February 2016 to an average 19.7 million bbl/day (BPD). Compared with January 2017, total domestic petroleum deliveries, a measure of US petroleum demand, also increased by 2.2%. For year to date, total domestic petroleum deliveries increased by 0.7% compared with the same period last year. The overall economy in the US showed gains again for the second time in the year, adding 235,000 jobs, according to the US Bureau of Labor Statistics (BLS). The US unemployment rate changed little, at 4.7% in February.

In February, gasoline deliveries, a measure of consumer gasoline demand, were up from the prior month but down from the prior year, and the prior year to date. Total motor gasoline deliveries decreased by 3.8% from February 2016 to an average 8.9 million screen-shot-2017-03-23-at-12-25-06-pmBPD – the second-highest February demand in nine years, since 2008. Compared with January 2017, total motor gasoline deliveries increased by 4.9%. For year to date, gasoline deliveries decreased by 3.3% compared with year to date of 2016. The average regular-grade gasoline price averaged $2.416/gal in February, according to the latest EIA price data. This was down 4 .2 cents from the prior month but was up 54.4 cents from the prior year. This February price was the second-highest for any month since June 2016.
Distillate deliveries averaged almost 4.0 million BPD in February, an increase of 0.9% compared with February 2016. These were the highest February deliveries in two years, since 2015. Compared with the prior month, February distillate deliveries increased by 6.4%. For year to date, distillate deliveries decreased by 0.2% compared with year to date 2016. Meanwhile, ultra-low sulfur distillate (ULSD) decreased by 0.4% compared with last year. Compared with February 2016, USLD prices were 57.0 cents higher. According to the latest EIA price data, ULSD prices decreased 1.2 cents from last month’s price of $2.580 /gal to an average $2.568 /gal in February.

According to the latest Manufacturing ISM Report on Business from the Institute for Supply Management (ISM) Survey, economic activity in the manufacturing sector expanded in February, and the overall economy grew for the 93rd consecutive month. The chair of the ISM Manufacturing Business Survey Committee stated that the Purchasing Managers Index (PMI) was registered at 57.7%, 1.7 percentage points above the January reading of 56.0%. According to the March Press Release ISM report, “comments from the panel largely indicate strong sales and demand, and reflect a positive view of business conditions with a watchful eye on commodities and the potential for inflation.”

Petroleum Supply

screen-shot-2017-03-23-at-12-30-04-pmCrude oil production increased by 0.7% from January, but was down by 1.3% from February 2016 to average just above 9.0 million BPD in February. This was the highest crude oil production for any month since March 2016. Compared with year to date 2016, crude production was also down by 1.9%. Natural gas liquids (NGL) production, a co-product of natural gas production, was down from the prior month but was up from the prior year and the prior year to date. At an average 3.4 million BPD, NGL production in February fell by 2.7% from January but was 2.9% higher than last year and 4.8% higher than year to date this time last year. This was the highest February output level on record. Compared with year to date 2016, NGL production increased by 4.8%.

screen-shot-2017-03-23-at-12-29-45-pmAccording to the latest reports from Baker Hughes, the average US rig count for February 2017 was 744, up 56 from the 688 counted in January 2017 and up 212 from the 532 counted in February 2016. However, last month’s count was the second-lowest February in more than 16 years, since 1999.

US total petroleum imports in February averaged nearly 10.4 million BPD, down by 2.7% from the prior month but up by 3.6% from the prior year. These were the highest February imports in five years, since 2012. For year to date, total petroleum imports were also up by 6.7% compared with year to date 2016. Crude oil imports increased by 2.8% from February 2016 to 8.1 million BPD in February 2017. Compared with January 2017, crude oil imports were 2.0% lower. For year to date, crude imports were up by 5.6% compared with year to date 2016. Refined product imports in February increased by 6.6% from the prior year to just below 2.3 million BPD, but were down by 5.2% from the prior month. Compared with year to date 2016, refined product imports increased by 11.0%.

screen-shot-2017-03-23-at-12-28-18-pmUS refinery gross inputs moved down by 2.2% from February 2016, averaging 15.8 million BPD. Compared with January 2017, refinery gross inputs were down by 4.6%. Compared with year to date 2016, refinery gross inputs were down by 0.4%. Production of all four major products – gasoline, distillate, jet fuel and residual fuels was higher than demand for those products, so refined products were exported. Exports of crude oil and refined petroleum products increased by 3.0% in February 2017, compared with February 2016, to average nearly 5.1 million BPD. This was the highest February export level ever. Compared with year to date 2016, crude oil and refined product exports were up by 5.2%. Refinery capacity utilization rate averaged 85.5% in February, down 2.8 percentage points from the prior year, and down 4.2 percentage points from the prior month. API’s latest refinery operable capacity was 18.480 million BPD.

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