The U.S. Energy Information Administration (EIA) has stirred up confusion among oil market observers with its recent substantial upward revision of America’s oil consumption and implied gasoline demand figures for May.
Initially, EIA’s weekly data releases for May indicated subdued U.S. gasoline demand, contributing to a decline in global oil prices and prompting concerns about demand from the world’s largest oil consumer. However, the monthly update for May, released with a two-month lag compared to the weekly reports, revealed significantly higher implied U.S. gasoline and overall oil demand.
This discrepancy between weekly and monthly data has left traders and analysts who closely monitor EIA reports bewildered, highlighting the inherent disparities between preliminary weekly estimates and more comprehensive monthly figures.
The EIA attributed the divergence to overestimated gasoline production and underestimated exports in its weekly assessments. An EIA spokesperson emphasized that the agency aims to align weekly and monthly data more closely, noting ongoing efforts to refine its methodologies for a more accurate reflection of the U.S. petroleum market.
In May, the EIA’s Petroleum Supply Monthly reported a record-high total crude oil and petroleum product supply of 20.8 million barrels per day (bpd), marking the highest-ever figure for that month and a significant increase of 792,000 bpd from April. Similarly, gasoline demand reached 9.396 million bpd, the highest since August 2019 and indicative of a robust rebound from pandemic lows.
Conversely, the weekly reports for May suggested weaker gasoline demand of just over 9 million bpd, trailing the levels seen in May 2023. Such discrepancies underscore the challenges in relying on weekly data for accurate market assessments, despite its role in providing timely indicators.
While the EIA’s revisions have sparked debate, alternative data from sources like GasBuddy have aligned more closely with the initial weekly estimates, reporting May’s gasoline demand at 8.87 million bpd. Patrick De Haan of GasBuddy commented on the disparity, suggesting that their data indicates a lower level of gasoline demand than what EIA’s revised figures suggest.
Recent updates from GasBuddy now indicate a surge in gasoline demand, recording 9.28 million bpd last week—the highest of 2024. This further complicates the market’s perception of U.S. oil and gasoline demand trends, emphasizing the need for caution when interpreting conflicting data sets.
Looking ahead, market participants will await the next monthly reports from the EIA to gain clarity on whether the divergent data points represent significantly different demand scenarios for the U.S. summer oil and gasoline markets.
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