Flight data confirm changes in overall U.S. jet fuel consumption estimates (8/26/2020)

Global consumption of transportation fuels has trended lower during the past several months as a result of the spread of the 2019 novel coronavirus (COVID-19) and efforts to contain and mitigate it. Although total U.S. jet fuel consumption has been particularly affected by these measures, averaging 29% lower during the first five months of 2020 than during the same time last year, analysis of flight-level data provided by Cirium on commercial passenger flights suggests that demand for jet fuel in the United States is likely recovering faster than in most other major aviation markets. Increased demand for aviation services and the compartively low share of travel that crosses international borders in the United States are driving this relatively fast recovery. ... More »

U.S. refineries respond to record-low demand by decreasing inputs to certain downstream units (8/19/2020)

Starting in mid-March 2020, transportation fuel demand in the United States decreased to record lows as a result of reduced economic activity and stay-at-home orders aimed at slowing the spread of the 2019 novel coronavirus disease (COVID-19). In response to low demand and decreased profitability, as measured by crack spreads, U.S. refiners decreased inputs of crude oil to atmospheric distillation units (ADUs) and decreased processing of fresh feed by downstream units in order to decrease output of certain products. Demand for gasoline and jet fuel fell faster than demand for diesel, and refiners decreased runs in units associated with gasoline production (such as catalytic crackers) more than they decreased runs in units focused on distillate production (such as catalytic hydrocrackers). ... More »

Aggregate and well-level data show magnitude and drivers of North Dakota's declining crude oil production (8/12/2020)

The sharp decline in petroleum demand caused by the 2019 novel coronavirus disease (COVID-19) and efforts to contain it has led to a similarly significant decline in the supply of petroleum in the second quarter 2020 and, by extension, crude oil production, both internationally and domestically. According to data from the U.S. Energy Information Administration (EIA), total U.S. crude oil production declined by 21.9% between December 2019 and May 2020, with the Federal Offshore Gulf of Mexico falling by 18.2%, Alaska by 16.0%, and the Lower 48 states (excluding North Dakota) by 19.4% (Figure 1). Although significant production declines were reported throughout much of the United States, North Dakota's reduction is particularly notable given its speed and severity; the state's production experienced a 41.6% decline between December 2019 and May 2020. ... More »

As lockdowns ease, May gasoline demand increases and crude oil production slows (8/5/2020)

The U.S. Energy Information Administration’s (EIA) data show that demand (tracked by EIA as product supplied) for gasoline increased month-over-month in May as many states began to relax stay-at-home orders, while demand for jet fuel continued to decline to historic lows because of reduced commercial air travel. The May data also show a decline in crude oil inventories—because of a narrow uptick in crude oil runs (or crude oil inputs to refineries)—and a large decline in crude oil production. EIA’s July Petroleum Supply Monthly (PSM), which includes the complete set of key U.S. petroleum data from May 2020, shows how crude oil and petroleum product markets continue to be affected by the changing measures taken to mitigate the spread of the 2019 novel coronavirus disease (COVID-19). ... More »

COVID-19's impact on global commercial jet fuel demand has been significant and uneven (7/29/2020)

Efforts to contain the 2019 novel coronavirus disease (COVID-19) have dramatically reshaped markets for key petroleum fuels, and consumption patterns for jet fuel have seen some of the largest changes. According to the International Energy Agency, global jet fuel demand averaged 8.0 million barrels per day (b/d) in 2019, which is less than both gasoil/diesel demand (28.9 million b/d) and gasoline demand (26.4 million b/d). But, air travel-and by extension jet fuel demand-has proved particularly vulnerable to the disruptions caused by COVID-19 mitigation efforts. As of July 29, 2020, of the 37 member states of the Organization for Economic Cooperation and Development (OECD), 32 are partially or completely closed to international air travel as a result of COVID-19 mitigation efforts. Only four remain free of restrictions, and one is in the process of reopening soon, according to data from travel company Booking Holdings Inc. In addition, air travel's high passenger density requirements, large share of nonbusiness travelers, and the long distances involved have further dampened demand. ... More »

Product crack spreads increase from recent lows but face uncertain demand, high inventories (7/22/2020)

U.S. gasoline and diesel crack spreads (the difference between the price of crude oil and the wholesale price of the petroleum product, which are used as estimates of refinery margins) diverged sharply in March as the 2019 novel coronavirus disease (COVID-19) spread. As COVID-19 mitigation efforts and travel restrictions were put in place, gasoline demand (as measured by product supplied) fell, pulling gasoline crack spreads down. During the same period, demand for diesel fuel remained relatively strong, which contributed to a sharp increase in diesel crack spreads. In April, diesel yields increased as demand fell, reducing the diesel crack spread, while gasoline demand began to increase. Since then, gasoline and diesel crack spreads in the U.S. Gulf Coast (home to about half of the U.S. refining capacity) have stabilized and moved together (Figure 1). However, high gasoline and distillate inventory levels are putting downward pressure on product prices and the crack spread, and the demand outlook remains uncertain. ... More »