After setting a record in February, U.S. oil exports declined over four consecutive months amid the shocks of the coronavirus pandemic, the U.S. Energy Information Administration (EIA) said.
Demand dropped in March and in the three ensuing months as countries across the globe initiated measures to limit virus outbreaks. With travel and overall activity limited, demand for gasoline needs plummeted and oil followed suit.
EIA estimated that global petroleum demand fell from 100.7 million b/d in the first half of 2019 to 90.0 million b/d in the first half of 2020. U.S. monthly exports set a record monthly high of 3.7 million b/d in February, but then declined steadily and dipped below 3 million b/d in May and June, the most recent month for which final data was available for the EIA report.
Exports fell to 3.6 million b/d in March and to 3.1 million b/d in April before declining to 2.9 million b/d in May. Exports then declined to 2.8 million b/d in June — 347,000 b/d lower than the June 2019 level.
That noted, U.S oil exports over the first six months of 2020 were still higher than they were in the same period of 2019, boosted by strong demand from Asia, analysts noted. Monthly exports averaged 3.2 million b/d in the first half of 2020, up from 2.9 million b/d in the first six months of last year.
Exports to China fueled a substantial share of the increase. Deliveries to the world’s second-largest economy climbed to 361,00 b/d in the first half of this year from 213,000 b/d in the first half of 2019. Exports in May were 1.3 million b/d and in June, they were 0.7 million b/d. During May and June, China was the largest destination for domestic oil exports.
Forecasting oil demand remains challenging and has kept prices in check after a modest summer recovery, largely because the pandemic continues to limit economic activity and its duration remains unknown. Health experts are braced for a second global wave of the disease, a development that could lead to additional government-imposed restrictions and renewed limits on energy demand.
The World Health Organization (WHO) this month said the virus was continuing to kill about 50,000 people per week globally. The United States hit the grim milestone Tuesday of more than 200,000 deaths alone. WHO officials noted that as cooler weather begins, more people will be motivated to stay indoors and increase the potential for virus spread. Influenza season also has begun to kick in as well, adding burden to health care systems.
“The energy has not gone out of this pandemic,” said WHO’s Mike Ryan, executive director of the health emergencies program.
Meanwhile, U.S. monthly oil imports dropped in April before rebounding in May and June. However, imports were still lower in the first half of 2020 than in the year-ago period, according to EIA.
U.S. oil imports averaged 6.2 million b/d in the first half of 2020, down 12% year/year. Monthly imports declined significantly in April, falling below 6.0 million b/d, before increasing above that threshold in May and June.
Imports from Saudi Arabia fueled the recent monthly rebounds, EIA said. Saudi imports rose to 1.2 b/d in May and June from 0.4 million b/d in April. This came on the heels of a surge in Saudi production in April, which developed after an earlier agreement to cut production by the Organization of the Petroleum Exporting Countries (OPEC) and partner countries expired and before a new agreement was reached.
OPEC has since trimmed its oil forecasts, however, indicating earlier this month it expects to see 2020 crude demand of 22.6 million, around 6.7 million b/d lower than in 2019.
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