Reuters' John Kemp is reporting:
The United States will probably consume a record amount of gasoline in 2016, passing the previous peak set in 2007, and the prospect is helping lift crude oil prices.
Recent data indicates the country is on track for its biggest-ever driving season this summer, which will keep refineries running flat-out turning crude into the motor fuel.
A rapid expansion in U.S. gasoline consumption has coupled with strong demand growth in India and China, falling crude output in the United States, and hedge funds turning bullish, to send crude and fuel prices surging.This is so incredibly interesting. I wrote the contango article about an hour ago; now this story. LOL.
U.S. motorists consumed 9.16 million barrels per day (bpd) of gasoline in 2015, just 125,000 bpd short of the record 9.29 million bpd set in 2007.
The U.S. Energy Information Administration (EIA) is still forecasting consumption in 2016 will remain slightly below the 2007 peak.
On Feb. 23, the EIA published a commentary titled “Motor gasoline expected to remain below 2007 peak despite increase in travel”.
But the agency has been revising its estimates higher in response to the extraordinary strength in demand exhibited in recent high-frequency data.
In December 2015, the EIA predicted gasoline consumption would rise by just 10,000 bpd in 2016. By January, it had upped its forecast increase to 70,000 bpd and in March, the agency raised the number to 90,000 bpd.
So, we'll see.
If we hit a record, the price of oil will rise 5% on that news, all things being equal (the price difference in the interval between 30 days before and 30 days after the 10-million-bbl day).