Is Gasoline Demand Really Slipping?
Genscape’s Weekly Gasoline Demand Report data shows relatively flat growth in weekly year-on-year demand for September through November. On the other hand, the U.S. Energy Information Administration (EIA) Weekly Products Supplied data has shown year-on-year declines over the same period despite lower gasoline prices.
Our data shows U.S. total motor gasoline spot prices averaged $1.56/gal on November 28, down almost $0.70/gal from the high of $2.25/gal on October 2, pushing prices to the lowest level since June 30, 2017. Gasoline demand generally increases during prolonged periods of low prices, casting doubt on the demand declines.
What’s Going On?
Genscape analyzed this discrepancy and found the root cause lies in the methodology differences between our data and the EIA. While our data is based on actual gasoline liftings from rack locations headed to gas stations/consumption points, EIA Product Supplied data, both weekly and monthly, is a calculation of implied demand for refined products. The EIA uses a combination of survey components, production, inputs, stock change, ethanol adjustment, imports, and exports in a formula to estimate demand.
This disparity between the two numbers appears to be related to the recent decrease in gasoline imports and increase in gasoline export levels, two factors that the EIA includes in its formula to calculate Products Supplied. By adding imports and subtracting exports, this shift change in recent import/export patterns has had a depressive effect on the Weekly EIA Products Supplied level, showing declining year-on-year demand during a time of sharply falling prices at the pump. The basis for the Genscape Weekly Gasoline Demand Report is total U.S. rack liftings, sourced from our Supply Side data. These rack liftings represent the movements of gasoline from secondary (rack) terminals to retail stations.
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