US crude oil refinery demand
The EIA (U.S. Energy Information Administration) released its “This Week in Petroleum” report on February 10, 2016. It reported that the US crude oil refinery demand fell by 105,000 bpd (barrels per day) to 15.5 MMbpd (million barrels per day) for the week ending February 5, 2016. Last week, the US crude oil refinery demand fell by 24,000 bpd for the week ending January 29, 2016. US refineries operated at 86.1% operable capacity for the week ending February 5, 2016—compared to 86.6% for the week ending January 29, 2016.
US refinery demand by region
The US refinery demand rose to 8 MMbpd in the Gulf Coast region for the week ending February 5, 2016. In contrast, the US crude oil refinery demand fell in the Midwest and West Coast regions for the same period. These three regions contribute to most of the US crude oil refinery demand.
US crude oil refinery demand in 2015
Currently, the US crude oil refinery demand is 0.6% less than the refinery demand of 15.56 MMbpd last year. The fall in refinery demand is due to record gasoline and distillate stocks. The weak refinery demand will lead to a rise in crude oil stocks. It will have a negative impact on crude oil prices. The fall in crude oil prices impacts oil producers like Devon Energy (DVN), Energen (EGN), Laredo Petroleum (LPI), and Pioneer Natural Resources (PXD). The fall in refinery demand also suggests weak retail demand. It impacts refiners such as Valero Energy (VLO), HollyFrontier (HFC), Marathon Oil (MPC), and Phillips 66 (PSX).
ETFs and ETNs like the Vanguard Energy ETF (VDE), the ProShares UltraShort Bloomberg Crude Oil ETF (SCO), the VelocityShares 3x Long Crude Oil ETN (UWTI), the SPDR S&P Oil & Gas Equipment & Services (XES), and the First Trust Energy AlphaDEX ETF (FXN) are also influenced by the roller coaster ride in oil and gas prices.
In the next part, we’ll discuss the latest crude oil price trends and forecast.