EIA: Oil Demand May Reach Pre-epidemic Levels By 2021

The U.S. demand for oil and liquid fuels is expected to remain below the 2019 average through August 2021, despite an increase in energy consumption in recent weeks, the U.S. Energy Information Administration (EIA) said On Monday.

Total demand for automotive gasoline, distillate fuel and jet fuel plummeted in March and April as states tried to contain the spread of the coronavirus, stay-at-home requirements and reduced travel.

Demand has picked up since the April low and will continue to grow in the second half of the year as economic activity picks up.

The EIA estimates that aggregate demand levels will remain below pre-crisis levels until August next year.

U.S. liquid fuel consumption hit 14.7 million barrels a day in April, the lowest monthly level since the early 1980s, according to government data.

The EIA said earlier this month that a sharp drop in oil demand in April led to the largest monthly increase in U.S. commercial crude inventories since 1920.

Quantitatively, nearly half of the big drop in fuel consumption this year is due to reduced gasoline use.

Demand for gasoline this year is 8.3 million barrels a day, down 1 million barrels a day, or 10 percent, from 2019.

With job growth, gasoline consumption will rise to 9.1 million barrels a day next year, about 2 percent below the 2019 average.

According to EiAJuly's Short-term Energy Outlook (STEO), US consumption of liquid fuels will reach 18.3m b/d this year, 2.1m b/d less than in 2019.

U.S. liquid fuel consumption next year will be 19.9 million barrels a day, still down from 20.5 million barrels a day in 2019, according to the EIA.

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