Despite the Biden administration’s growing emphasis on electric vehicles (EVs) and renewable energy, demand for gasoline in the U.S. this summer remains high, according to recent reports. This trend surprised experts and could be contributing to a drop in prices at the pump.
In May, U.S. gasoline demand surged to its highest level since 2019, with American oil needs remaining higher than usual for most of the ensuing months.
Gasoline demand has been above the U.S. average for four of the last five weeks. This resulted in American crude oil stockpiles decreasing more than expected for the fifth consecutive week. Analysts previously predicted a modest decline of 200,000 barrels, but the actual decrease was nearly 3.5 million barrels.
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This larger-than-expected drop could be partly due to earlier misleading statistics.
Initial weekly updates from the Energy Information Administration (EIA) in May suggested that oil and fuel demand struggled to match last year’s levels. However, the EIA’s monthly report later revealed that U.S. oil consumption in May actually reached seasonal record highs.
These conflicting figures are closely monitored by traders and analysts who use them to make market decisions. As a result, oil prices have been falling amid broader stock market concerns and uncertainties about future demand.
Consumer gasoline costs fell by 5.6 cents per gallon compared to a month ago, with a drop of 3.5 cents just in the past week. Experts predict that prices will continue to decline during the week of Aug. 5, even as reports indicate a nearly 4% rise in gasoline demand.
[JACK AYLMER]
EVS AND RENEWABLE ENERGY HAVE BEEN ALL THE RAGE.
BUT REPORTS THIS WEEK HAVE SHOWN GASOLINE ISN’T GOING ANYWHERE JUST YET.
IT’S A TREND CATCHING EXPERTS BY SURPRISE – POTENTIALLY CONTRIBUTING TO LOWER PRICES AT THE PUMP.
A FEW MONTHS AGO IN MAY, U.S. GASOLINE DEMAND JUMPED TO ITS HIGHEST LEVEL SINCE 20-19.
THAT INCREASED NEED FOR GAS HAS MOSTLY CONTINUED THROUGHOUT THIS SUMMER.
FOUR OUT OF THE LAST FIVE WEEKS – WE’VE SEEN GASOLINE DEMAND ABOVE THE U.S. AVERAGE.
AND JUST THIS WEEK, AMERICAN CRUDE OIL STOCKPILES DECREASED MORE THAN EXPECTED FOR THE FIFTH CONSECUTIVE SEVEN-DAY STRETCH.
ANALYSTS EXPECTED COMMERCIAL CRUDE OIL INVENTORIES TO FALL BY JUST 200,000 BARRELS THIS WEEK.
INSTEAD, THE RECORDED DECREASE REACHED NEARLY THREE AND HALF MILLION BARRELS.
THAT DIFFERENCE COULD PARTLY BE ATTRIBUTED TO MISLEADING STATISTICS COMING OUT EARLIER THIS YEAR.
WEEKLY UPDATES FROM THE ENERGY INFORMATION ADMINISTRATION INDICATED THAT DURING THE MONTH OF MAY OIL AND FUEL DEMAND WAS STRUGGLING TO EVEN MATCH LAST YEAR’S LEVELS.
FAST FORWARD TO LAST WEEK WHEN THE E-I-A’S MONTHLY REPORT CAME OUT – AND U.S. OIL CONSUMPTION ACTUALLY SAW SEASONAL RECORD HEIGHTS FOR THE MONTH OF MAY.
THESE CONFLICTING NUMBERS ARE OFTEN RELIED UPON BY TRADERS AND ANALYSTS TO MAKE DECISIONS REGARDING MARKET TRENDS.
AND WITH THIS ALL HAPPENING AGAINST THE BACKDROP OF A LARGER STOCK MARKET SELL-OFF THIS WEEK:
OIL PRICES ARE FALLING DUE TO CONCERNS OVER FUTURE LEVELS OF DEMAND.
CONSUMER COSTS ARE DOWN 5.6 CENTS PER GALLON COMPARED TO A MONTH AGO, DROPPING THREE-AND-A HALF-CENTS SINCE LAST WEEK.
SOMETHING EXPERTS SAY WILL CONTINUE THROUGH THIS WEEK DESPITE REPORTS OF AN ALMOST 4 PERCENT RISE IN GAS DEMAND.
JACK AYLMER – STRAIGHT ARROW NEWS.
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