The U.S. economy burned through an average of 20.46 million barrels of crude oil and related liquids each day last year. That was about 500,000 barrels per day (BPD), or 2.5% more than 2017’s total, and the largest demand increase in more than a decade.
America accounted for 20.5% of the world’s oil and related liquid consumption last year. However, the amount of oil the U.S. used to make fuels like gasoline actually fell last year.
Oil Demand can be broken into the below 4 categories. Here’s a look at what actually drove demand growth;
Light distillates, which are refined into things like gasoline.
Middle distillates, which are the types of oil used to make jet fuel, heating kerosene, and diesel.
Fuel oils, which are used as a marine bunker fuel for ships, as well as for home heating.
Others, which are the types of oil that are turned into solvents, wax, and lubricants. This category also includes natural gas liquids (NGLs) like liquid petroleum gas (LPG) and ethane, which petrochemical companies use as the raw materials in manufacturing plastics and chemical products.
America’s significant drivers of oil demand were in middle distillates. Consumption rose by 3.8% to nearly 6 million BPD. That was due in part to strong economic growth, which drove demand for diesel to fuel 18-wheelers and other commercial vehicles. In addition, America is exporting increasing qualities of diesel and jet fuel to global markets where prices are higher.
The amount of oil used to make fuel oils fell by 5.9% due to warmer winter temperatures across the U.S., as well as the ongoing shift toward heating homes with cleaner-burning natural gas.
One of the key findings for the growing demand for oil and liquids is directly related to petrochemical plants. Chief economist Dale Spencer stated that “the increased importance of petrochemicals in driving oil demand growth was also evident in the global production breakdown, with products most closely related to petrochemicals accounting for around half of the overall growth in demand.”
While America’s demand for oil and related liquids reached new heights last year, it’s not because they’re consuming more gasoline. Instead, it was mainly due to the completion of several new petrochemical plants that turn liquids like NGLs into the building blocks of plastics. With the second wave of petrochemical plants coming and more export capacity under construction, U.S. demand should continue rising.
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