The Energy Information Administration (EIA) reported on Monday that U.S. oil demand increased to its highest seasonally since 2019, with total consumption rising 1.2% from June to July, clocking in 20.48 barrels per day.
July consumption figures have not reached this level in five years.
At the same time, EIA data shows U.S. oil output as slightly slower for July, shedding 25,000 bpd to 13.205 million bpd for the month.
For gasoline, demand also reached a five-year seasonal high, with jet fuel demand hitting 1.83 million bpd, representing not just a seasonal high, but the biggest numbers in general since August 2019.
The question now is whether the rising U.S. consumer demand will coincide with a slowdown in output amid heavy stockpiles.
So far, there appears to be a mixed bag, with Texas seeing production decline by some 34,000 bpd from June to July, and North Dakota seeing production fall by 20,000 bpd during the same time period. New Mexico was the outlier, with production rising by 25,000 bpd to balance out the other losses. Natural gas production in the U.S. rose to a five-month high during the same time period.
Last week, oil moved lower after the EIA’s weekly inventory report showed a decline of 4.5 million barrels for the week to September 20, compared to a draw of 1.6 million barrels the previous week and a 1-million-barrel build prior to that.
Oil prices on Monday were struggling for some traction, with analysts continuing to interpret and reinterpret China’s economic data for demand indications, and with geopolitical tensions escalating in the form of what Washington sees as an imminent Israeli ground assault on Lebanon.
By Charles Kennedy for Oilprice.com
