In a surprising turn of events, the US oil market has defied expectations, with demand surging to its highest level in three years. According to the latest data from the US Energy Information Administration, total oil consumption jumped 1.2% in July, reaching 20.48 million barrels per day – the highest figure for that month since 2019.
Gasoline and ultra-low sulfur diesel demand also reached record highs for the season, while jet fuel consumption soared to its highest level since August 2019, with 1.83 million barrels per day. This uptick in demand comes as a welcome respite for the industry, particularly when compared to major consumers like China, which have struggled under economic pressures.
However, the news isn’t all rosy. US oil production slowed marginally for the second time in three months, with total output falling by 25,000 barrels per day to 13.205 million barrels per day in July. This decline has sparked concerns among oil analysts and investors, who have been watching for signs of a slowdown in US production.
Regionally, Texas, the top oil-producing state, saw a decline of 34,000 barrels per day to 5.71 million barrels per day in July – its first monthly drop since January. North Dakota, the third-largest oil-producing state, also experienced a decline, with output falling by 20,000 barrels per day to 1.16 million barrels per day, the lowest since January.
On the other hand, New Mexico, the second-largest oil producer, bucked the trend, with output rising by 25,000 barrels per day to a record 2.04 million barrels per day.
In related news, gross natural gas production in the US Lower 48 states reached a five-month high of 116.7 billion cubic feet per day in July, according to the EIA’s monthly 914 production report. This marks the first time gas output has risen for two consecutive months since December 2023. Texas and Pennsylvania, the top gas-producing states, saw their monthly output rise to record highs of 35.7 billion cubic feet per day and 21.0 billion cubic feet per day, respectively.
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