BY Brian L. Milne, Energy Editor, Schneider Electric
Preliminary data from the Energy Information Administration (EIA) shows unseasonably strong demand for gasoline during the fourth quarter, holding above the five-year average for nearly all weeks during the last three months of the year after keeping below the seasonal average consistently during the first six months of 2013.
During the four weeks ended Dec. 13—the latest data available, implied gasoline demand was 315,000 bpd or 3.7% higher than during the comparable period in 2012 at 8.787 million bpd. The higher demand came despite a decline in gasoline exports, with the rate at 363,000 bpd compared with exports at 462,000 bpd in 2012.
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Implied demand measures product supplied to the primary market by adding ending supply, production and imports and subtracting from that sum exports and remaining inventory.
For 2013 through Dec. 13, implied gasoline demand is up 111,000 bpd or 1.3% from the corresponding year-ago period at 8.759 million bpd.
The robust demand rate is yet another signpost on the road to economic recovery in the United States and greater growth after a sluggish rebound from the Great Recession. It’s been a slow slog since the recession ended in June 2009 replete with false starts and pessimism, with data of late offering the clearest signal yet that the US economy has found its footing and would continue to expand in 2014.
The Bureau of Economic Analysis Dec. 20 said the U.S. economy expanded at a 4.1% annualized growth rate in the third quarter while the Department of Labor previously reported the national unemployment rate fell in November to a 7% five-year low.
The Federal Reserve announced Dec. 18 it would begin tapering its bond buying in January by $10 billion from its $85 billion per month pace, citing the improving economy. Markets rallied despite news of tapering, as sentiment shifted to focus on the greater economic growth rate viewed in late 2013 and expected to continue into 2014, implying more demand for oil products.
After declining for the third straight week through Dec. 16 to a $3.245 gallon one-month low, EIA’s U.S. retail gasoline average for all formulations of regular grade gasoline is poised to move higher right before Christmas on higher wholesale costs. Wholesale gasoline costs moved higher across the country during the third week of December, with most major metropolitan markets experiencing 10 cents or greater increases.
About the Author
Brian L. Milne is the Energy Editor for Schneider Electric—a leading business-to-business provider of real-time commodity information services among many other activities. Milne has been focused on the energy industry for 18 years as an analyst, journalist and editor. He can be reached at [email protected].