US oil demand rose y/y by 0.16 mb/d to 20.48 mb/d in December, a 0.26 mb/d downward revision from the weekly EIA estimates—we expected a 0.5 mb/d downward revision. Combined demand for the four main products increased by 0.12 b/d y/y. Final November data show a y/y increase of 0.24 mb/d, with full-year 2018 growth at almost 0.5 mb/d, led by distillates (0.2 mb/d).
US gasoline demand fell by 28 thousand b/d y/y to 9.2 mb/d in December 2018, despite US consumer prices falling by 0.1% m/m. That fall was the first m/m decrease in nine months, driven by a 3.5% drop in energy prices. The steep correction in oil prices amid global oversupply and slowing global economic growth resulted in an 11.8% m/m drop in gasoline prices.
US distillate demand rose by 53 thousand b/d y/y to 4.03 mb/d, even though the Institute for Supply Management (ISM) manufacturing index fell sharply by 9.6% m/m to 54.1 in December 2018, setting a 25-month low.
US crude imports fell by 0.39 mb/d m/m and by a massive 0.68 mb/d y/y to 7.10 mb/d in December 2018. OPEC led the drop (-0.25 mb/d m/m), falling to its lowest since May 1987, led by Iraq (-0.17 mb/d m/m) and Saudi Arabia (-0.16 mb/d m/m). Imports from Canada fell by 0.55 mb/d m/m on a high base, followed by Kuwait (-85 thousand b/d m/m) and Brazil (-41 thousand b/d).
US crude exports fell m/m in December 2018 by 98 thousand b/d to 2.51 mb/d. The drop was led by Latin America (-0.24 mb/d m/m) as flows to Chile plunged (-93 thousand b/d m/m) after a high base in November 2018. Canada also took fewer barrels (-0.11 mb/d m/m), with exports at 0.43 mb/d. Flows to Europe were flat m/m at 0.67 mb/d, while exports to Asia rose by 0.20 mb/d m/m.