Reduced economic activity resulting from shelter-in-place restrictions due to COVID-19 drove significant near-term disruptions to energy markets in the month of April with U.S. petroleum demand falling nearly 27 percent to 14.2 million barrels per day (mb/d), according to data released today in the American Petroleum Institute’s April 2020 Monthly Statistical Report (MSR). Gasoline deliveries fell more than 31 percent in April to their lowest level since 1972, while jet fuel posted its largest monthly decline on record, falling nearly 56 percent to 0.6 mb/d. On a weekly basis, total U.S. petroleum demand rebounded by 1.6 mb/d as of May 1 after appearing to bottom out during the second week of April.
“April was widely expected to reflect the weakest oil market data yet – and may be a low point that is reflected on for decades to come,” API Chief Economist Dean Foreman said. “Significant uncertainty remains over the state of oil markets in the weeks ahead, but the realignment of the supply and demand balance coupled with the gradual reopening of state economies leads us to be cautiously optimistic that the worst may be behind us.”
On the supply side, U.S. oil-targeted drilling fell a record 52 percent over the past two months as producers adjusted output to align with this historic decline in demand. Domestic oil production fell 0.9 mb/d in April to 12.0 mb/d, which combined with reductions in natural gas and other liquids output, amounted to the largest monthly decline in U.S. total liquids supply on record.
“The industry’s operational flexibility has enabled producers to adjust output and mitigate against this swift and sudden decline in demand,” Foreman said. “While the challenges we face today are historic and unprecedented in nature, we remain confident that the U.S. natural gas and oil industry can emerge stronger, more resilient and well-positioned to meet the worlds long-term needs for affordable, reliable and ever-cleaner energy resources.”
Read the full April 2020 Monthly Statistical Report here.
API represents all segments of America’s oil and natural gas industry. Its more than 600 members produce, process, and distribute most of the nation’s energy. The industry supports 10.9 million U.S. jobs and is backed by a growing grassroots movement of millions of Americans. API was formed in 1919 as a standards-setting organization. In its first 100 years, API has developed more than 700 standards to enhance operational and environmental safety, efficiency and sustainability.
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