Must-know: Why products supplied are increasing

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Dec. 4 2020, Updated 3:53 p.m. ET

Products supplied

Products supplied indicate petroleum product consumption. It measures these products’ disappearance from its primary sources—refineries, natural gas-processing plants, blending plants, pipelines, and bulk terminals. Finished motor gasoline, kerosene-type jet fuel, distillate fuel oil, residual fuel oil, propane or propylene, and other oils are included in the calculation of total products supplied.

Product supplied

Weekly products supplied rising

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For the week ending October 3, 2014, total products supplied were 19 million barrels per day (or bpd)—compared to 18.6 million bpd in the first week of September. Except propane or propylene, the other products supplied recorded an increase on a year-over-over (or YoY) basis. Meanwhile, on a week-over-week basis, total products supplied dipped marginally to 19 million bpd from 19.4 million bpd. Kerosene-type jet fuel, residual fuel oil, and other oils recorded an increase.

Over the last four weeks, an average of 19.2 million bpd of product oil were supplied. This was up by 1.1% from the same period last year.

Effect on crude tankers

Looking ahead to 2015, the U.S. Energy Information Administration (or EIA) forecasted that the U.S. will consume 18.92 million bpd of oil. This is down from 18.96 million in 2013. Also, the EIA estimates that output will climb to 9.5 million bpd next year—the highest since 1970.

As a result of weakening demand, the agency curbed its forecasts for Organization on Petroleum Exporting Countries (or OPEC) oil and other liquid fuels production to 35.51 million bpd in 2015. This was down 350,000 bpd from last month’s forecast.

In the last month, the agency also reduced its global demand projections for this year and next year. The International Monetary Fund cut its 2015 world economic growth forecast.

The latest data available shows that oil demand in 2014 will be higher than what it was in 2013. However, if the EIA’s estimate is correct and oil demand is lower than in 2013, crude tanker companies—like Frontline Ltd. (FRO), Teekay Tankers Ltd. (TNK), Nordic American Tanker Ltd. (NAT), and Tsakos Energy Navigation Ltd. (TNP) and the Guggenheim Shipping ETF (SEA)—could be negatively affected.

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