México

Guyana

Trinidad
& Tobago




Very usefull links



PW
Bookstore





News links

AP

AFP

Aljazeera

Dow Jones

Oil price

Reuters

Bloomberg

Views and News
from
Norway

 

 

 

 

U.S. gasoline consumption stalls, adding to oil producers' problems -John Kemp


 

 


By John Kemp / Reuters

LONDON
Petroleumworld 01 30 2019

U.S. gasoline consumption was flat in the first 10 months of 2018 as escalating motor fuel prices offset the impact of a strong economy and big employment gains.

Flat-lining U.S. gasoline consumption combined with surging U.S. shale production and a slowing global economy to push the oil market towards surplus and explains the plunge in prices late last year.

Gasoline consumption averaged 9.34 million barrels per day (bpd) between January and October 2018, which was slightly down from 9.36 million bpd in the same period in 2017.

Full-year consumption is forecast to have declined by around 40,000 bpd, according to estimates from the U.S. Energy Information Administration (“Short-Term Energy Outlook”, EIA, December 2018).

Consumption has shown little or no growth since 2017 after four years of variable but strong gains between 2013 and 2016 (“Petroleum Supply Monthly”, Energy Information Administration, December 2018).

Fuel use has flattened off even as the rate of economic growth has accelerated to an annual rate of more than 3 percent and almost 5 million non-farm jobs have been created since the end of 2016.

But stagnating gasoline consumption has been consistent with a sharp slowdown in the growth of traffic on the nation's roads in the last two years ( tmsnrt.rs/2S6klHd ).

Traffic volumes surged between 2014 and 2016, with vehicle-miles travelled often rising at year-on-year rates of 2-3 percent or more, but slowed sharply in 2017 and 2018, with gains slowing to 1 percent or less.

Traffic volume in the three months from September to November 2018 was just 0.3 percent higher than in the same period a year earlier (“Traffic Volume Trends” Federal Highway Administration, December 2018).

In the last quarter of a century, traffic growth has been closely correlated with both the state of the economy and changes in the cost of fuel.

While the economy has remained supportive, higher oil prices have been strongly negative for gasoline consumption.

Falling prices between 2014 and 2016 provided a stimulus to consumption but subsequent rises have caused that effect to unwind.

GLOBAL SLOWDOWN

The deceleration in U.S. gasoline consumption is one reason climbing oil prices helped push the global oil market towards a surplus in 2018 and why prices needed to fall to rebalance production and consumption.

The impact of rising prices on U.S. motorists also explains why they are so sensitive for U.S. politicians and why President Donald Trump aggressively pressed OPEC to bring prices down last year.

Finally, stagnating U.S. gasoline consumption explains why the oil market has become ever-more reliant on emerging markets and freight transport to absorb output growth from U.S. shale and other sources.

Global oil consumption growth and prices have become increasingly sensitive to changes in economic growth outside the United States and the other advanced economies.

As signs of a global slowdown in trade became evident in the second and third quarters of 2018, it became increasingly clear consumption growth would decelerate and prices would have to decline.

Once the United States decided to grant generous sanctions waivers to Iran's most important customers, allowing them to continue buying the country's crude, the last remaining support was removed and prices fell.

Lower prices are a necessary part of the market's rebalancing process and, over time, should help restore some consumption growth in the United States and more importantly in emerging markets.

But with so much consumption growth now geared towards China and other emerging markets, the outlook for market balance and prices in 2019/2020 will remain dominated by concerns about a possible global slowdown.

Until the threat of a global slowdown is lifted, oil prices will struggle to recover, despite the efforts of OPEC and its allies to reduce production.


________________________



We invite you to join us as a sponsor.

Circulated Videos, Articles, Opinions and Reports which carry your name and brand are used to target Entrepreneurs through our site, promoting your organization’s services. The opportunity is to insert in our stories pages short attention-grabbing videos, or to publish your own feature stories.

Hit your target - Advertise with us

PW 300.000 plus request per week

Story by John Kemp from Reuters.

reuters.com
01 29 2019


Copyright© 1999-2019 Petroleumworld or respective author or news agency. All rights reserved.

We welcome the use of Petroleumworld™ (PW) stories by anyone provided it mentions Petroleumworld.com as the source.

Other stories you have to get authorization by its authors. Internet web links to http://www.petroleumworld.com are appreciated.

Petroleumworld welcomes your feedback and comments, share your thoughts on this article, your feedback is important to us!

We invite all our readers to share with us
their views and comments about this article.

Write to editor@petroleumworld.com

By using this link, you agree to allow PW
to publish your comments on our letters page.

Any question or suggestions,
please write to: editor@petroleumworld.com

Best Viewed with IE 5.01+ Windows NT 4.0, '95,
'98,ME,XP, Vista, Windows 7,8,10 +/ 800x600 pixels

Twitter: @petroleumworld1


 

Contact: editor@petroleumworld.com,

Editor & Publisher: Elio Ohep/
Contact Email: editor@petroleumworld.com

CopyRight © 1999-2019, Elio Ohep A. - All Rights Reserved. Legal Information

PW in Top 100 Energy Sites
 

CopyRight©1999-2019, Petroleumworld ™  / Elio Ohep - All rights reserved\This site is a public free site and it contains copyrighted material the use of which has not always been specifically authorized by the copyright owner.We are making such material available in our efforts to advance understanding of business, environmental, political, human rights, economic, democracy, scientific, and social justice issues, etc. We believe this constitutes a 'fair use' of any such copyrighted material as provided for in section 107 of the US Copyright Law. In accordance with Title 17 U.S.C. Section 107, the material on this site is distributed without profit to those who have chosen to view the included information for research, information, and educational purposes. For more information go to: http://www.law.cornell.edu/uscode/17/107.shtml. If you wish to use copyrighted material from this site for purposes of your own that go beyond 'fair use', you must obtain permission fromPetroleumworld or the copyright owner of the material.