US gasoline demand continues to sizzle

US gasoline demand continues to sizzle: DOE Analysis

New York (Platts)--12May2004


A 289,000 b/d increase in production to 9.1-mil b/d and a 301,000 b/d jump in
imports to 919,000 b/d was insufficient to offset sizzling US gasoline demand,
causing a 1.5-mil bbl draw in inventories, according to data released
Wednesday by the Department of Energy. Gasoline demand rose 447,000 b/d to
9.373-mil b/d. "This is probably retail stockpiling ahead of a rampaging price
and Memorial Day weekend," Tim Evans, energy analyst at IFR Energy Services,
said in a report. "The critical aspect of today's numbers is gasoline since
gasoline is the product running at a deficit to the averages," Evans added.
Gasoline inventories at 202.5-mil bbl was 6.1-mil bbl below year-ago levels
and 8.2-mil bbl below the five-year average. However, Kyle Cooper, energy
analyst at Citigroup, was more circumspect about the gasoline data, "Is the
draw in West Coast gasoline stocks and jet enough to support the entire energy
complex?"

Gasoline inventories fell 2.6-mil bbl in PADD V, or the West Coast, while
PADDs I, or the Atlantic Coast, II, or the Midwest and III, or the Gulf Coast
had a 1.2-mil bbl build in gasoline stocks. Total US jet fuel rose 400,000
bbl, but PADD V stocks fell 800,000 bbl. High gasoline production resulted
from a 465,000 b/d jump to 15.954-mil b/d in crude runs, causing a 3% increase
in utilization. But the 1.1-mil bbl build in inventories was not enough to cap
the raging bull market in crude futures. "This is a trend run amok," Evans
said, adding inventories are at their highest level in 18 months.

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