COVID-19 brought major disruptions for energy markets for April, API reports
In the American Petroleum Institute’s (API) latest monthly statistical report, the effects of COVID-19 and the reduced economic activity it has brought with it were on full display, showcasing staggering near-term disruptions across energy markets.
Petroleum demand alone fell nearly 27 percent. Throughout April, demand for petroleum had dropped to 14.2 million barrels per day. Gas fared no better, plummeting 31 percent to its lowest level since 1972, while jet fuel posted its largest monthly decline ever, tanking by nearly 56 percent to levels of just 0.6 mb/d.
However, the week of May 1 saw U.S. petroleum demand rebound by 1.6 mb/d.
“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.”
Supply was also pared back as producers adjusted to align with the stark turn. U.S. oil-targeted drilling fell 52 percent over the past two months, and domestic oil production fell 0.9 mb/d in April, leaving the total at 12 mb/d. All told, U.S. total liquids supply saw their largest monthly decline in history.
“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 world’s long-term needs for affordable, reliable and ever-cleaner energy resources.”
