U.S. refiners say there is no indication across their channels that America's fuel demand is weakening, contrary to recent data about gasoline consumption.
The weekly inventory reports from the EIA at the beginning of July pointed to faltering demand after nationwide gasoline prices hit an average of $5 a gallon in the middle of June. During earnings calls this week, however, some of the largest U.S. refiners said they hadn't seen any signs of demand destruction.
"Through our wholesale channel, there's really no indication of any demand destruction. In June, we actually set sales records. We sold 911,000 barrels a day in the month of June, which surpassed our previous record in August of '18 where we did 904,000 barrels a day," Gary Simmons, Executive Vice President and Chief Commercial Officer at Valero Energy, said on the conference call on Thursday.
"We read a lot about demand destruction, mobility data showing in that range of 3% to 5% demand destruction. Again, we're not seeing it in our system. We did see a bit of a lull in the first couple of weeks of July, but our seven-day averages now are back to kind of that June level, with gasoline at pre-pandemic levels and diesel continuing to trend above pre-pandemic levels," Simmons added.
Tom Nimbley, chief executive at PBF Energy, said, "We're at basically the same levels we've been for the last 90 days," commenting on demand on the company's earnings call.
The latest reporting week in EIA data showed that gasoline demand increased from 8.52 million barrels per day (bpd) to 9.25 million bpd last week, AAA said on Thursday. While the national average gasoline price has dropped since Monday to $4.255 a gallon as of Friday, the rebounding demand and the latest decline in gasoline inventories "could pressure pump prices and slow price decreases if the trend holds," AAA noted.
According to data from fuel-savings app GasBuddy, Sunday-to-Wednesday U.S. gasoline demand was up 1.04% from last week, and was the highest of any Sunday-Wednesday period so far this year, exceeding the week ahead of July 4, Patrick De Haan, head of petroleum analysis for GasBuddy, said on Thursday.
By Tsvetana Paraskova for Oilprice.com
More Top Reads From Oilprice.com:
- Big Oil Set For Blowout Performance, But What Comes Next?
- Why The U.S. Is Desperate For A Russian Oil Price Cap
- Saudi Arabia’s Real Production Capacity: Is 15 Million Bpd Possible?