The latest weekly report from the U.S. Energy Information Administration (EIA), released on Wednesday, October 2, shows a decline in gasoline and diesel demand, dropping to 12.1 million barrels per day (b/d) after last week's estimate of 13.227 million b/d. This change suggests that earlier figures may have been overestimated. Despite the drop, total current demand remains above last year's levels, signaling that overall fuel consumption is still holding steady as we move into the fall season.

Distillates are expected to outperform gasoline in the coming weeks. October is typically a strong month for distillate demand, and current trends suggest it might outperform gasoline this season. This is partly due to the export market, with the US sending over 1.5 million b/d of distillate overseas last week, boosting international distribution despite domestic production lagging behind last year's levels.

According to EIA, distillate inventories remain mixed. New England saw a drop of 200,000 barrels, and the Middle Atlantic experienced a 600,000-barrel decrease. However, the total Northeastern inventory of 23.3 million barrels is 6.1 million barrels higher than this time last year, indicating that there is still a healthy stockpile to meet seasonal demand.

Refinery Maintenance Affects Output

The report highlighted ongoing refinery maintenance as a major factor in the reduced throughput. Nationwide, total refinery runs fell by 600,000 b/d, mainly due to a 404,000 b/d drop in the Midwest and a 124,000 b/d reduction on the Gulf Coast. Facilities such as Marathon-Detroit, BP-Whiting, and a Cenovus plant in Ohio were impacted by routine maintenance. A brief power outage at Citgo-Lemont also contributed to the decline in regional refining capacity.

On the Gulf Coast, operational issues at LyondellBasell and TotalEnergies further hindered output, while a major turnaround at Marathon Petroleum's Garyville refinery added to the region's reduced processing volumes.

Despite the dip in refinery activity, the US gasoline market remains well supplied. Finished motor fuel production was robust at 9.76 million b/d, well above the estimated domestic demand of 8.75 million b/d. This excess production contributed to a net export surplus of 422,000 b/d. However, gasoline stocks in the Gulf Coast are worth monitoring, as they dropped by more than 5 million barrels compared to last year.

The East Coast, however, holds relatively high stocks at 61 million barrels-up from 59.3 million barrels in 2023 and significantly above the 54.2 million barrels reported at the end of September 2022. In contrast, the West Coast has seen prices remain elevated due to strict summer fuel regulations, though inventories rose by 900,000 barrels last week.

US Crude Stocks Rebound

A decline in refinery input helped drive up US crude inventories by 3.9 million barrels. Meanwhile, domestic crude production has regained strength, reaching 13.3 million b/d, thanks to a 100,000 b/d increase in output from the Lower 48 states. This uptick likely reflects restored operations in the Gulf of Mexico, which had faced disruptions earlier in the year.

Record Exports Amid Seasonal Patterns

Total US product exports surged to 7.17 million b/d, pushing overall US petroleum exports to more than 11 million b/d. Early autumn often sees increased cargo shipments, and this year is no different. Last week's export levels, though strong, are still below the 11.5 million b/d seen at this time last year.

While overall demand is still above last year, the impact of refinery maintenance and the shifting seasonal patterns will be critical factors to watch in the coming weeks. Distillate exports remain a key driver, supporting international supply chains even as domestic inventories show mixed signals.

Public link

Please use the above public link if you want to share this noodl on another website.