Petroleum products use falls to lowest level in decades amid COVID-19 pandemic

by Talk Business & Politics staff ([email protected]) 449 views 

U.S. consumption of petroleum products has fallen to its lowest level in decades because of measures that limit travel and because of the general economic slowdown as a result of mitigation efforts for the COVID-19 (coronavirus) pandemic, according to the U.S. Energy Information Administration (EIA).

The EIA released Wednesday (April 22) its Weekly Petroleum Status Report that shows total petroleum demand was an average of 14.1 million barrels per day in the week ending April 17, up slightly from 13.8 million barrels per day in the previous week. The latter was the lowest level in EIA’s weekly data series going back to the early 1990s. The most recent value was 31% lower than the average between January and March 13, or before many of the travel restrictions started.

In the week ending April 3, the total U.S. product supplied of petroleum products declined by 3.4 million barrels per day, the largest weekly decrease in EIA’s data series. Since that week, changes have been more subdued, indicating that consumption might be becoming stable.

Total petroleum demand measured as product supplied consists mostly of motor gasoline (45% of the 2019 total), distillate fuel oil (20%), jet fuel (9%) and chemical feedstocks and other fuels (26%).

Motor gasoline consumption has fallen the most in absolute terms. Based on 2020 data through March 13, or before many businesses were shut down and stay-at-home orders were issued, motor gasoline product supplied was an average of 8.9 million barrels per day. Since then, motor gasoline product supplied has declined 40% to 5.3 million barrels per day as of the week ending April 17. The decline in motor gasoline product supplied accounts for 54% of the total change in product supplied. U.S. consumption of jet fuel has fallen the most in relative terms, declining 62% from a pre-shutdown average of 1.6 million barrels per day to 612,000 barrels per day on April 17.

So far, the decline in distillate fuel oil consumption has been less severe than the changes in motor gasoline and jet fuel. Through March 13, the distillate product supplied was an average of 3.9 million barrels per day in 2020. By the week ending April 17, distillate product supplied declined 20% to 3.1 million barrels per day. Distillate fuel oil is primarily consumed as diesel fuel, the predominant fuel of the trucking, locomotive and agricultural sectors. Continued demand for distribution of necessities such as food and medical supplies and increased home deliveries for goods likely contributed to the somewhat stable demand for distillate fuel in the weeks following the shutdown.