API: U.S. petroleum demand sustains its highest level in 11 years

5/18/2018

WASHINGTON -- The American Petroleum Institute (API) reported that the first four months of this year saw U.S. petroleum demand average 750,000 bpd above the same period in 2017 despite higher prices, a sign of solid economic activity. April also saw the U.S. produce a record 10.5 MMbpd of oil.

“Iranian oil supply uncertainty has recently dominated global oil market news, but a key figure from the United States should trump that concern: two million barrels per day of U.S. production,” said API Chief Economist Dean Foreman. “The strong supply figure was also backed by strong petroleum demand of over 20.3 MMbpd last month, motor gasoline demand for first four months of 2018 was the second highest on record. Economic fundamentals continue to propel petroleum markets at home and abroad.”

Consumer gasoline demand, as measured by total motor gasoline deliveries, of 9.3 MMbpd in April was up by 1.3% from March and 1.1% versus April 2017. The first four months of the year achieved the second highest year-to-date demand (9.1 MMbpd) on record.

Strong global demand raised international oil prices by more than domestic ones. Domestic WTI crude oil prices averaged $66.25/bbl in April, up by 5.6% from March and 29.7% versus April 2017. Meanwhile, international Brent crude oil prices continued to increase by more – 8.5% m/m in April to $71.63/bbl, which reinforces global economic and oil demand strength.

WTI crude oil traded as an average discount of $5.38/bbl below Brent in April, which was the second consecutive monthly increase in the price differential and returned it to the same level as in January. As U.S. production has expanded rapidly, infrastructure constraints continued to suppress WTI prices. By comparison, Light Louisiana Sweet crude oil had weaker constraints and traded at a discount to Brent of $2.23/bbl in April.

April highlights:

  • U.S. petroleum sustained its highest levels in 11 years.
  • Distillate fuel rose un-seasonally to 4.2 MMbpd.
  • Jet fuel demand achieved its strongest April on record.
  • Strong global demand raised international oil prices by more than domestic ones.
  • The U.S. petroleum trade balance shrank by 380,000 bpd for the month of April.
  • U.S. petroleum exports set new record above 7 MMbpd in April.

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