US oil demand for July was revised lower by 275 thousand b/d, with the bulk of the revision concentrated in the ‘other oils', which were revised lower by 428 thousand b/d. This takes total US oil demand to 18.601 mb/d, lower y/y by 177 thousand b/d (0.9%). The main four products, however, were revised higher, by 153 thousand b/d to 14.257 mb/d. Fuel oil and gasoline saw the largest upward revisions, of 92 thousand b/d and 60 thousand b/d respectively, taking them to 0.418 mb/d and 8.819 mb/d over July. Distillate demand was revised higher by just 25 thousand b/d, to 3.552 mb/d, and so remained sluggish, in line with the weak economic growth backdrop. With today's revisions, gasoline demand in July was lower y/y by 212 thousand b/d (2.3%), while distillate demand was lower y/y by 12 thousand b/d (0.3%).
Given today's downward revision to Q2 US GDP, from 1.7% to 1.3%, it is hardly a surprise that distillate demand has weakened considerably since May, given distillate's exposure to economic activity. In fact, contrary to popular belief, gasoline demand has outperformed that of diesel this year. In the year-to-date, despite a retail price average of $3.7 per gallon (a record average thus far), gasoline demand is running lower y/y by just 25 thousand b/d (0.3%). In contrast, US diesel demand is running lower y/y by 184 thousand b/d (4.6%) in the year-to-date, and has been the second weakest product so far this year after fuel oil.
Meanwhile, the trend of upward revision to inventories continued, with total crude and products revised higher by 8.8 mb. Crude stocks, however, were revised lower by 1.1 mb, while product stocks were revised higher by 9.9 mb. Unfinished oils saw the largest upward revision of 4.3 mb, followed by gasoline and distillates at 2.9 mb and 2.8 mb respectively. Relative to a year-ago, crude stocks were 22 mb higher and relative to the five-year average, they were 33.2 mb higher. Product stocks, despite the upward revision, were 10 mb lower y/y, and 36.18 mb lower relative to the five-year average, excluding other oils. Including all products, total products inventories were 2 mb higher than the five-year average.