US distillate demand returns to 2019 levels earlier than gasoline, jet fuel

The combination of increases in both travel and economic activity in the United States has contributed to more demand for gasoline, distillate and jet fuel, as reflected in the product supplied data of The Energy Information Administration’s Weekly Petroleum Status Report. Although demand has increased for all three of these products from their 2020 lows, the extent of the demand growth has differed by product.

According to the June 23 WPSR, which includes data through June 18, demand for all three fuels was lower than during the same week in 2019, the year before COVID-19 mitigation efforts began in the United States. For the week ending June 18, the four-week average demand for gasoline was 94 percent of the four-week average for the same week in 2019, distillate was 98 percent, and jet fuel was 74 percent. At their lowest points in 2020, gasoline demand fell to 56 percent of its corresponding 2019 level, distillate demand to 80 percent, and jet fuel demand to 31 percent.

EIA estimates product supplied by the volume of petroleum products delivered out of the primary supply chain. Although product supplied is a reasonable proxy for consumption, weekly data may show volatility due to temporary demand, trade, or inventory fluctuations. As a result, a four-week rolling average often provides a better indication of longer-term consumption trends.

Based on rolling four-week averages, U.S. gasoline demand fell from 9.3 million barrels per day (b/d) during the week of March 13, 2020, (when President Trump declared a national emergency) to 5.3 million b/d on April 24, 2020. Beginning this March, however, demand started growing again, and consumption rose above 9 million b/d during the week of May 21 for the first time since March 20, 2020. For the week ending June 18, gasoline product supplied averaged 9.1 million b/d, 94 percent of the 2019 level for the corresponding week.

Demand for U.S. jet fuel has also increased from its 2020 lows as personal travel has increased, but it has not approached its 2019 levels as closely as gasoline and distillate have. International travel restrictions, concerns about rising COVID-19 case counts in other countries, and reduced business travel have probably contributed to the relatively slower return in jet fuel demand. In addition, the growth in jet fuel demand may be slower than gasoline and distillate fuel if travelers continue to avoid flying. For the week ending June 18, jet fuel product supplied averaged 1.3 million b/d, 74 percent of 2019 levels for the corresponding week.

COVID-19 did not affect distillate consumption as much as gasoline or jet fuel consumption. Distillate consumption in the United States is driven by economic activity and is more directly affected by changes in freight transport than by reduced travel or work-from-home trends. Demand for distribution of necessities, such as food and medical supplies, and increased home deliveries for goods likely contributed to relatively stable demand for distillate fuel during 2020. For the week ending June 18, distillate product supplied averaged 3.9 million b/d, 98 percent of 2019 levels for the corresponding week.

More detailed analysis of this topic can be found in This Week in Petroleum published June 23.