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EIA data – Driving season nearly here


This week’s EIA data saw implied gasoline demand jump over 0.4mmb/d (+5.4% WoW) from last week’s lowly 8.4mmb/d to the highest YTD, in also the largest WoW movement YTD, and back within the seasonal range. The rise in demand comes a week ahead of the start of the US driving season on 27 May (Memorial Day) but also amid particularly subdued YoY demand in recent weeks. In fact, on a 52-week average basis, gasoline demand has stagnated around the -1.5% YoY level in the past ten weeks.

Gasoline imports shot up 0.4mmb/d (61.1%) WoW with most of the increment landing in East Coast PADD 1, despite already high inventory levels and therefore presumably in anticipation of sustained incremental demand during the driving season. Refiners and blenders upped gasoline production 0.3mmb/d (3.2%) WoW. With the rise in gasoline production and imports overwhelming the pick-up in demand, gasoline inventory gained 3.0mmbbl (1.4%) WoW to 220.7mmbbl, which was both unexpected and counter-seasonal. Gasoline inventory levels have risen from the seasonal average to the top of the seasonal range in just two weeks, while on a Days Forward Cover basis, gasoline inventory appears even more plentiful than in absolute terms, comfortably exceeding the top of its seasonal range.

There was another weekly drop in US crude production, down 63kb/d WoW but remaining at the 7.3mmb/d level. The growth rate since the beginning of the year now implies full year average crude production at around 7.4mmb/d, or a 0.9mmb/d (+14.8%) YoY increase, 0.1mmb/d lower than last week’s estimates. However, that is still in line with the EIA’s estimates per the latest Short Term Energy Outlook and also higher than the 0.8mmb/d YoY growth in US liquids output the IEA has forecast in its May edition of the Oil Market Report.

Meanwhile, US crude inventory drew less than market expectations, down 0.3mmbbbl (-0.1%) WoW, and over three times less than the seasonal average draw, while total inventory actually built WoW, up 4.2mmbbl, and remains above the top of the seasonal range, as it has since the start of the year. 

Colin Smith, Marc Jacouris
VTB Capital analyst

EIA, gasoline, USA, oil, IEA

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