U.S. oil demand down almost 20m barrels per day
- June 1, 2020: Vol. 7, Number 6

U.S. oil demand down almost 20m barrels per day

by Mike Consol and Andrea Zander

The coronavirus-related decline in economic activity has dealt a body blow to U.S. petroleum deliveries, plummeting by 19.4 million barrels per day in March, according to a report from the American Petroleum Institute (API). When compared with the same months of 2019, February and March petroleum demand decreased 4.6 percent and 4.0 percent, respectively, and represents the lowest March demand since 2015.

With large sectors of the economy sidelined by closure and shelter-in-place edicts from state and federal governments to combat spread of the COVID-19 virus, commercial activity has slumped dramatically and throttled the sales of gasoline, diesel and jet fuel. Consumer gasoline demand was 8.2 million barrel per day in March, a decline of 8.7 percent from February and 10.6 percent compared with March 2019, even as gas prices were trimmed by 8.1 percent, as reported by AAA.

Though demand has been shrinking, the U.S. oil business has racked up 38 straight months of new year-on-year crude oil production records, despite reduced drilling activity. March petroleum inventories exceeded their levels from one year ago for the 17th straight month and have been steadily rising. According to the Weekly Petroleum Status Report, U.S. crude oil inventories are at 519 million barrels, or about 9 percent above the five-year average for this time of year. Total motor gasoline inventories increased by 1.0 million barrels this past week and are about 12 percent above the five-year average for this time of year.

A report by the International Energy Agency provides an almost real-time view of the COVID-19 pandemic’s extraordinary impact across all major fuels. Based on an analysis of more than 100 days of real data through the first few months of this year, the IEA’s Global Energy Review includes estimates for how energy consumption and carbon dioxide emissions trends are likely to evolve over the rest of 2020.

“This is a historic shock to the entire energy world. Amid today’s unparalleled health and economic crises, the plunge in demand for nearly all major fuels is staggering, especially for coal, oil and gas. Only renewables are holding up during the previously unheard-of slump in electricity use,” said Dr. Fatih Birol, executive director of the IEA. “It is still too early to determine the longer-term impacts, but the energy industry that emerges from this crisis will be significantly different from the one that came before.”

The report projects that energy demand will fall 6 percent in 2020 — seven times the decline after the 2008 global financial crisis. In absolute terms, the decline is unprecedented — the equivalent of losing the entire energy demand of India, the world’s third largest energy consumer. Advanced economies are expected to see the biggest declines, with demand set to fall by 9 percent in the United States and by 11 percent in the European Union.

The IEA report can be read at this link:


Mike Consol ( is editor of Real Assets Adviser, and Andrea Zander is website content editor at Institutional Real Estate, Inc.

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