Strong Refinery Demand, Tight Supply, Robust Fuel Consumption: July 2024

Stay Informed and Stay Ahead: Market Watch, July 22nd, 2024

Commodities

Summary of Weekly Petroleum Data for the Week Ending July 12, 2024

• The weekly petroleum data offers insights into the U.S. energy market dynamics, essential for understanding broader economic trends.

Key Takeaways:

• Refinery Capacity Utilization: Operating at 93.7% indicates strong demand for refined products, reflecting economic activity and energy consumption patterns.
• Crude Oil Imports and Inventories: Inventory levels below the five-year average may indicate tighter supply conditions.
• Products Supplied: Increased total products supplied, particularly gasoline and distillate fuels, signals robust demand linked to economic growth, consumer behavior, and industrial activities.

Summary: For the week ending July 12, 2024:

• Refinery inputs and gasoline production decreased slightly, while distillate production increased.
• Crude oil imports rose, leading to a slight decrease in commercial crude oil inventories.
• Gasoline and distillate inventories saw significant increases, with propane/propylene inventories well above the five-year average.
• Total products supplied indicate a slight uptick in demand compared to last year, reflecting ongoing economic activity and consumer behavior.

Refinery Inputs and Production:

• Crude Oil Refinery Inputs: Averaged 16.9 million barrels per day (down by 181,000 barrels per day from the previous week).
• Operable Capacity: Refineries operated at 93.7% of their capacity.
• Gasoline Production: Decreased to an average of 9.5 million barrels per day.
• Distillate Fuel Production: Increased to an average of 5.2 million barrels per day.

Imports:

• Crude Oil Imports: Averaged 7.0 million barrels per day (up by 277,000 barrels per day from the previous week). Over the past four weeks, averaged 6.7 million barrels per day (1.1% higher than the same period last year).
• Motor Gasoline Imports: Averaged 728,000 barrels per day.
• Distillate Fuel Imports: Averaged 108,000 barrels per day.

Inventories:

• Commercial Crude Oil: Decreased by 4.9 million barrels to 440.2 million barrels (5% below the five-year average).
• Motor Gasoline: Increased by 3.3 million barrels (slightly above the five-year average).
• Distillate Fuel: Increased by 3.5 million barrels (7% below the five-year average).
• Propane/Propylene: Increased by 4.6 million barrels (16% above the five-year average).
• Total Commercial Petroleum: Increased by 10.4 million barrels.

Products Supplied:

• Total Products Supplied: Averaged 20.5 million barrels per day (up by 1.2% from the same period last year).
• Motor Gasoline Supplied: Averaged 9.1 million barrels per day (up by 0.2%).
• Distillate Fuel Supplied: Averaged 3.6 million barrels per day (up by 3.9%).
• Jet Fuel Supplied: Increased by 0.7%.

Historical Context and Economic Implications

This week’s data highlights several significant trends and their potential impacts on the broader economy:

1. Refinery Capacity Utilization: The high utilization rate of 93.7% underscores strong demand for refined products, indicative of a healthy economy and energy consumption.
2. Crude Oil Imports and Inventories: The rise in imports and the decline in inventories suggest a balancing act between domestic production, import reliance, and consumption. Below-average inventory levels point to tighter supply conditions.
3. Production Adjustments: The reduction in gasoline production and increase in distillate fuel production align with seasonal demand patterns and shifts in transportation and industrial activities.
4. Increased Product Supply: The overall rise in products supplied, especially gasoline and distillate fuels, indicates robust consumer and industrial demand, suggesting continued economic growth and increased mobility.