Oil prices may be ticking upward, but oil demand still isn't getting any relief from jet fuel demand, according to the Energy Information Administration's This Week in Petroleum report published on Wednesday.
Could you ever have conceived of a holiday week in the United States where the airline industry would have burned through just half the amount of jet fuel that it used a year ago?
According to the EIA, jet fuel demand from commercial passenger jets leaving U.S. airports over the 2020 Thanksgiving week was roughly 600,000 barrels per day. This compares to more than 1.2 million barrels per day over the same week a year earlier.
Oil's problems are bigger than that, though. Total consumption of major petroleum transportation fuels-which include motor gasoline, distillates, and jet fuel-for this last Thanksgvigin wee was down 11% compared to a year earlier. This is a 1.7 million barrel per day drop (600,000 bpd of which was jet fuel).
All this weighs on oil demand and oil prices, particularly as gasoline inventories in the United States continue to grow. Over the last three weeks, according to the EIA, gasoline inventories in the United States have grown a total of 8.7 million barrels.
The lack of demand for finished products is stressing refiners in the United States, with nearly a dozen refineries in the United States scheduled to close, including the largest refinery in the United States, Shell's Convent Louisiana refinery, which closed after it was unable to find any willing buyers.
Total U.S. refinery capacity shutdowns so far are estimated to be about 1.2 million bpd, according to Raymond James.
ExxonMobil, on the other hand, is looking to invest millions into its Baton Rouge refinery so that it can process different types of crude grades to make the refinery more competitive.
By Julianne Geiger for Oilprice.com
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Julianne Geiger is a veteran editor, writer and researcher for Oilprice.com, and a member of the Creative Professionals Networking Group. More