Led by gasoline and seasonal demand for heating fuels, US petroleum demand hit 20.3 million b/d in February. Demand was up by more than 1 million b/d from February 2017, nearing record highs not seen for more than a decade, according to the American Petroleum Institute.
“The economy and energy demand have continued to show solid momentum so far in 2018,” said API Chief Economist Dean Foreman. “With US oil and NGL production at record levels—and a resilient industry value chain that has absorbed the growth—consumers are benefiting from this momentum and enjoying affordable and reliable fuels made right here at home.”
The strength in US petroleum demand is consistent with indicators that the macroeconomic backdrop has remained solid. However, crude prices declined in February after seven consecutive monthly increases. International crude oil prices fell by more than domestic ones (5.4% for Brent vs. 2.3% for WTI) in February. WTI crude oil prices averaged $62.23/bbl, down 2.3% from January, while Brent averaged $65.32/bbl for the month, down 5.4% from January.
At these prices, US supply achieved new highs for production in February of crude oil (10.3 million b/d) and natural gas liquids (4.1 million b/d). US refineries also processed crude and other feedstocks (16.4 million b/d) at record levels for the month, which displaced petroleum imports other than a seasonal winter need for distillate.
In addition, the US rig count climbed to 984 rigs as of Mar. 9 and has averaged 959 rigs through this year’s first quarter; this represents an increase of 4% above the average for fourth-quarter 2017 and should position US production for continued growth.
