- 09 Jul
US EIA says fuel volumes to increase
The US Energy Information Administration in their July Short Term Energy Outlook projects increased fuel volumes again this year. The full US EIA STEO report can be found here.
In the tug of war between ongoing increased fuel efficiency of new vehicles driving fuels demand down, and employment growth and lower fuel prices that drive fuels demand up, the US EIA projects that employment growth and lower fuel prices will continue to win and pull up volume demand in 2015.
In 2014, motor gasoline consumption rose by 80,000 b/d. In 2015 the US EIA projects that growth to be over twice as much, or 170,000 b/d (1.9%). But looking ahead to 2016, the US EIA says higher prices and increased fuel efficiency will reverse the two year trend, projecting a decrease in gasoline consumption by 20,000 b/d (0.2%). Still, if that projection proves to be accurate, demand in 2016 will be 150,000 b/d higher than 2014 and 230,000 b/d higher than 2013.
Consumption of distillate fuel, which includes diesel fuel and heating oil, is forecast to rise 2.3% or 90,000 b/d in 2015 and by 1.7% or 70,000 b/d in 2016. This growth is driven by increasing manufacturing output, foreign trade, and marine fuel use.
From a fuel price management perspective, this volume growth is a welcome respite from the many years of volume declines. While it’s certain that volumes like this cannot last forever, this report points to the urgency to make hay while the sun shines and take advantage of the opportunity at hand.