OECD Americas Oil Demand - June 2016

US oil demand, mainly supported by rising gasoline requirements, came up strong in March 2016, recording the highest monthly y-o-y growth since August 2015, at 0.4 mb/d or 2.0%. To a large extent, this growth originates in the road transportation sector and particularly gasoline.

This was also been supported by solid growth in new car registrations, notably pick-up truck and sport utility vehicles (SUVs). Strong gains have been observed in propane/propylene and residual fuel oil demand, while distillate fuel requirements declined y-o-y as a result of warmer weather, both compared to the same month a year earlier and the historical normal.

The 1Q16 has shown solid growth in US oil demand, with an overall growth of 0.2 mb/d, as compared to the same quarter of last year and with gasoline accounting for the lion’s share of that growth. Preliminary April and May 2016 volumes, which are based on weekly data, imply a continuation of this positive trend, with transportation fuels accounting for the bulk of these increases.

The 2016 US oil demand growth depends on several factors, such as the economy, the degree of substitution with other commodities and the oil price environment. However, potential remains skewed to the upside, compared with last month’s publication, as a result of recent developments in the demand for transportation fuels – such as the dominance of pick-ups and SUVs in new car sales.

In Mexico, April 2016 was a month of growth for oil demand and was dominated by substantial decreases in the demand for residual fuel oil, which was partly offset by slight increases in LPG demand. However, this was partly offset by y-o-y declines in gasoline and residual fuel oil requirements.

The latest March 2016 Canadian data showed overall declines in oil demand. Losses were seen for LPG and gas diesel oil requirements, and have been partly offset by strong gains in the demand for gasoline and naphtha. The 2016 projections for Canadian oil demand remain unchanged from those reported last month and foresee a slight decline as compared to 2015.

In 2015, OECD Americas oil demand grew by 0.24 mb/d as compared to 2014. For 2016, OECD Americas oil demand is projected to grow once more by 0.26 mb/d as compared to the previous year.