In the latest Petroleum Supply Monthly, US oil demand for September was revised lower by 218 thousand b/d. Every part of the barrel, including ‘other oils', was revised lower for the first time since May 2008, with the main four products revised lower by 195 thousand b/d to 13.937 mb/d, the lowest since January 2012 and ‘other oils' by 23 thousand b/d. This takes total US oil demand to 18.173 mb/d in August, lower y/y by 718 thousand b/d (3.8%). Gasoline saw the largest downward revision, taking total gasoline demand in September to 8.575 mb/d, lower y/y by 169 thousand b/d (1.9%). However, it is the weakness in distillates that continues to stand out, which was revised lower by 34 thousand b/d to 3.681 mb/d, despite already showing a very sluggish reading in the preliminary figures. As a result, distillate demand for the month was lower y/y by 255 thousand b/d (6.5%) and is yet to show any signs of significant improvement, although the preliminary November figures are showing some signs of life. In the year-to-date, distillate demand is running lower y/y by 157 thousand b/d (3.9%), while gasoline demand is lower by 19 thousand b/d (0.2%).
Among the other products, jet fuel demand was revised lower by 45 thousand b/d to 1.379 mb/d, the lowest since April 2012, flipping the y/y growth to negative territory in September compared to the preliminary figures. Demand for fuel oil was revised lower by 19 thousand b/d to just 0.3 mb/d in September, down y/y by a substantial 189 thousand b/d (38.5%), as natural gas continues to eke out oil products in power generation. The downward revision of 23 thousand b/d to ‘other oils' yields a y/y decline of 68 thousand b/d (1.6%). Indeed, all products were down y/y in September for the first time since January this year, which stands at a contrast to the latest macroeconomic data. There is an improving macroeconomic backdrop with rising home and auto sales, and falling unemployment, although business confidence has remained subdued (reflected in the continuous underperformance of distillates to gasoline this year) due to uncertainty surrounding the fiscal cliff. While Hurricane Isaac curtailed some activity in the Gulf Coast at the end of August and early September, it is unlikely to have made a significant difference to an already weak US oil demand backdrop.
Meanwhile, US inventories were revised higher by a large 23.8 mb in September, with total products accounting for 20.3 mb. Within that, gasoline was revised higher by 5.1 mb and distillate by 4.7 mb. Despite the revisions higher, both gasoline and distillate inventories remained substantially lower y/y, and broadly stable m/m.