Petroleum demand drops in March according monthly API report

Petroleum demand dropped 4.6 percent in the United States in March to 19.4 million barrels per day (mb/d), according to data from the American Petroleum Institute’s March 2020 Monthly Statistical Report.

The decline is largely due to the stay-at-home orders throughout the country to slow the spread of the coronavirus.

“Current data through March, based on API’s surveys of the industry, highlight the deep energy market effects of the ongoing public health crisis, but also provide timely and statistically valid estimates in a period of tremendous uncertainty,” API Chief Economist Dean Foreman said. “As demand decelerated over the latter half of the month, total U.S. petroleum demand decreased by 934,000 barrels per day, which is a large decease but provides a relatively stronger point of departure than many third-parties have projected. Importantly, we saw a monthly downturn in U.S. crude oil production, which shows the market is responding appropriately. Our primary focus now should be on addressing this virus, so that we can restore public health and the economy, with energy as a key enabler.”

U.S. crude oil production dropped to 12.9 mb/d in March as producers adjusted to the decline in demand. Drilling activity was down nearly 25 percent in March compared to March 2019.

Deliveries rose 5.2 percent in March to 4.1 mb/d, likely reflecting an increase in truck freight demand. Demand for liquid feedstocks, such as naphtha and gasoil, remains up nearly 14 percent year-over-year, suggesting that refining and petrochemical production continued despite the slowdown.

API represents all segments of America’s oil and natural gas industry, with more than 600 members that produce, process, and distribute most of the nation’s energy.