Left Menu
Development News Edition

U.S. crude stockpiles rise, fuel demand drops as virus effects start to hit -EIA

Reuters | Updated: 25-03-2020 21:06 IST | Created: 25-03-2020 21:06 IST
U.S. crude stockpiles rise, fuel demand drops as virus effects start to hit -EIA

U.S. crude oil stockpiles rose last week, but one-week demand for fuels showed its biggest drop since December in the first inkling that the coronavirus pandemic is denting the country's energy demand.

The coronavirus has sickened nearly 400,000 people worldwide, destroyed gasoline demand as people stay home, and has brought air travel to a virtual halt globally. In coming weeks, fuel demand is expected to fall sharply, and the report's measures on demand showed a notable drop in products supplied, the U.S. Energy Information Administration said. The EIA's measure of products supplied, a proxy for U.S. demand, showed a 2.1 million barrel-per-day in the most recent week to 19.4 million bpd.

"Gas demand is down a bit so it might be showing up there. Distillate demand is also down a slight bit. In the coming weeks we will see how the lock-ins will affect demand," said Gene McGillian, vice president of market research at Tradition Energy. Motor gasoline product dropped by 859,000 bpd, even though that figure still shows a 1.2% increase for the four-week average from a year ago. Jet fuel demand fell to 1.47 million bpd, an 18% decline for the week, and a figure that will surely grow worse with most flights grounded worldwide. Distillate product supplied was off by 5% on the week.

Inventory figures do not show much of an effect from the outbreak or the Saudi Arabia-Russia price war yet. Crude inventories rose by 1.6 million barrels in the week ended March 20 to 455.4 million barrels, compared with analysts' expectations in a Reuters poll for a 2.8 million-barrel rise. Inventories, which have risen for nine straight weeks, are expected to keep rising in coming weeks as fuel demand declines and refineries pare back activity.

For this most recent week, however, refineries continued to run at relatively strong rates for the season. Refinery utilization rates rose by 0.9 percentage points to 87.3% of their available capacity. Refiners have been running down gasoline and diesel fuel stocks to their lowest since December, in anticipation of weeks of slack demand.

U.S. gasoline stocks fell by 1.5 million barrels last week to 239.3 million barrels, the EIA said, compared with analysts' expectations for a 657,000-barrel drop. "We saw a much larger draw on gas than the poll would have indicated. I was thinking we would see larger product builds on the gasoline side, just because it seems anecdotally that demand is falling and perhaps it will be more reflective in next week's report," said Ryan Kaup, a commodities broker at CHS Hedging. ​

Distillate stockpiles, which include diesel and heating oil, fell by 679,000 barrels in the week to 124.4 million barrels, versus expectations for a 1.9 million-barrel drop. U.S. crude futures were down 14 cents to $23.88 a barrel by 11:25 a.m. ET (1525 GMT), while Brent fell 3 cents to $27.12 a barrel. (Reporting By David Gaffen; Editing by David Gregorio Editing by Marguerita Choy)

(This story has not been edited by Devdiscourse staff and is auto-generated from a syndicated feed.)

Download The Devdiscourse News App for Latest News.


TRENDING

OPINION / BLOG / INTERVIEW

Education post-coronavirus: Schools to rush for more digitalization

Digital education would undoubtedly boom in the post-coronavirus world, supported by educational institutions that have discovered its efficiency during the crisis, but it is still not expected to outshine traditional classroom learning....

Public health care post-COVID 19 to go for revamping, not rebooting

Until now, the economies used to classify healthcare sector under social expenditure. However, the devastation caused by COVID 19 pandemic has upgraded public healthcare on topmost priority and core economic activity for controlling future ...

Coronavirus lockdowns to speed up long-pending revamping of supply chains

With millions of production lines impacted, business disruptions to some extent are unavoidable and the lessons learned from this turbulence will leave an everlasting impact on both global and local levels of supply chains....

Videos

Latest News

Instacart, Amazon workers strike as labor unrest grows during coronavirus crisis

Warehouse, delivery and retail gig workers in the United States went on strike on Monday to call attention to safety and wage concerns for people laboring through the coronavirus crisis. Among those were some of the roughly 200,000 workers ...

Airlines line up furloughs; Air New Zealand sees smaller carrier in a year

Major global airlines projected layoffs, furloughs and capacity cuts over the next few months, with Air New Zealand warning that it expected staffing levels to be 30 smaller than it is now, due to the coronavirus pandemic. Airlines have bee...

U.S. Congress eyes next steps in coronavirus response

Three days after passing a 2.2 trillion package aimed at easing the heavy economic blow of the coronavirus pandemic, the U.S. Congress was looking on Monday at additional steps it might take as the countrys death toll approached 3,000. Demo...

Venezuela's Maduro says post-pandemic recovery requires OPEC+ deal

Venezuelan President Nicolas Maduro on Monday said an economic recovery after the coronavirus pandemic subsides will depend on a deal by the OPEC grouping of the worlds largest oil exporters to guarantee fair prices for crude.Maduro said he...

Give Feedback