As EIA Puzzles Out Other Oils, Core US Oil Demand Grows
Tuesday September 30, 3:55 pm ET
By David Bird, Of DOW JONES NEWSWIRES
NEW YORK -(Dow Jones)- U.S. July petroleum products demand has been revised up to record levels, even as the government tries to come to grips with its accounting for a catch-all subgroup known as "other oils," which makes up 25% oil consumed.
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July oil demand was revised up from preliminary estimates by 262,000 barrels a day to 20.175 million b/d, a record for the month, data from the Energy Information Administration show.
The revised figure shows July oil demand up 99,000 b/d from a year ago, not down 163,000 b/d, as the preliminary data suggested.
Key petroleum products, such as gasoline and distillate fuel led the way higher in the revision, but EIA said it's trying to improve its method of accurately tracking other oils, the umbrella category for liquefied petroleum gases and other products which fall outside the core group.
July gasoline demand was revised up by 22,000 b/d to 9.209 million b/d, a record for the month and the second-highest monthly demand level ever recorded. Demand was up 66,000 b/d from a year earlier.
Demand for distillate fuel, comprising diesel fuel and home-heating oil, was revised up by 4%, or 142,000 b/d, to stand at 3.678 million b/d, just 5,000 b/d below the July record set a year ago.
Demand for jet fuel was revised down by 25,000 b/d, to 1.623 million b/d and was off 56,000 b/d from a year ago. But the July figure is still the highest since December 2002.
July demand for heavy residual fuel used in power plants was revised up by 29, 000 b/d, to 786,000 b/d and was up 172,000 b/d from a year earlier.
"Other Oils" Estimated
EIA tracks demand and inventories for the key products through weekly surveys, but other oils data is only estimated on a weekly basis.
Earlier this summer, estimates of demand for other oils were revised down sharply, appearing to pull down the overall demand figure.
That's because strong natural gas prices encouraged producers to cut back on extracting natural gas liquids (LPGs, primarily ethane) from "wet" natural gas, leading lower supply numbers for other oils than was assumed based on historical trends.
While natural gas prices have started to ease, demand patterns for other oils are returning to normal levels, but EIA said it had to revise inventory data to reflect this change.
"Going forward, assuming the trend continues, it is likely that August 2003 data for "other oils" inventory levels will be revised upward significantly again, perhaps by somewhere between 10-20 million barrels," EIA said in the Sept. 24 issue of its This Week In Petroleum report.
"And it is likely that even now, "other oils" inventory levels, as reported in the weekly data are being underestimated. EIA is aware of this problem and is expecting to use a new system sometime within the next several months that should allow us to improve our estimates of weekly data on "other oils" inventory levels.
"It's important to understand that this problem with "other oils" inventory levels should in no way impact data on weekly inventory levels for crude oil, gasoline, distillate fuel, jet fuel and residual fuel oil, as data for all of these products are collected on EIA's weekly surveys," EIA said.
"And in similar fashion, while the disconnect with "other oils" may also affect "other oils" demand and consequently total petroleum demand, it has no impact whatsoever on demand for gasoline, distillate fuel, jet fuel, and residual fuel. All of these variables are based on data collected on the weekly surveys, so revisions have been minimal for these products." |
