The U.S. Energy Information Administration (EIA) has recently perplexed oil market observers with a significant upward revision in America’s oil consumption and implied gasoline demand for May.
Initially, the EIA’s weekly data releases for May indicated weak U.S. gasoline demand. This perception contributed to a decline in international oil prices and raised concerns about demand in the world’s largest oil consumer.
However, the monthly update for May, published two months after the weekly reports, showed substantially higher implied U.S. gasoline and overall oil demand.
Traders and analysts who rely on EIA’s weekly reports for trade signals and demand forecasts were left confused by the conflicting data.
Discrepancies between weekly and monthly data are not unusual. Weekly data is more preliminary and based on estimates. However, the gap in the latest monthly update for May is unusually large, suggesting two different narratives for U.S. oil demand.
According to the EIA, the discrepancy arose due to overestimated gasoline output and undercounted exports, as noted by Reuters’s Shariq Khan.
The EIA aims to show general trends in demand with its weekly data. The administration strives to align weekly and monthly data more closely, a spokesperson told Reuters. The agency has made several adjustments to better reflect the state of the U.S. petroleum market.
One might wonder why these revisions are significant. The weekly estimates indicated a weak start to the summer driving season, with demand trailing last year’s levels. In contrast, the monthly report suggested American oil demand set a seasonal record high for May, with gasoline demand at its highest level since the pandemic, the most since August 2019.
The EIA’s Petroleum Supply Monthly reported that America’s total crude oil and petroleum product supply, a proxy for oil demand, was 20.8 million barrels per day (bpd) in May—the highest-ever for May and the highest since August 2023. This figure was 792,000 bpd higher than in April.
The supply of finished motor gasoline, the EIA’s proxy for gasoline demand, stood at 9.396 million bpd for May. This is a post-pandemic high, with the most gasoline supplied since August 2019.
Yet, the weekly reports in May showed implied gasoline demand was 380,000 bpd lower than that figure. The weekly reports indicated demand was just over 9 million bpd in May, compared to more than 9.1 million for the same month in 2023.
These large discrepancies are puzzling the market. However, participants and analysts tend to react more to the weekly data than to the figures published with a two-month lag.
Traders and analysts also rely on data from private firms tracking supply and demand to assess U.S. oil demand.
Data from fuel-tracking platform GasBuddy showed May’s gasoline demand was 8.87 million bpd, which aligns more closely with the EIA’s weekly estimates than the monthly report.
Patrick De Haan, head of petroleum analysis at GasBuddy, commented on the EIA’s revision, saying, “GasBuddy data suggests that gasoline demand is nowhere near what EIA is printing. Take that as you will.”
Recently, GasBuddy’s data and analysis indicated very strong gasoline demand in the past week. GasBuddy data models U.S. gasoline demand last week at 9.28 million bpd, which is “the highest tally of 2024,” De Haan said on Monday.
Traders and analysts will be watching the next monthly reports from the EIA closely to determine if the conflicting data will continue to suggest two very different demand pictures and outlooks for U.S. summer oil and gasoline demand.