Analysis: EIA Data Shows Storm Effects on Output, Demand

VIENNA (DTN) – U.S. crude oil production dropped 480,000 bpd in the week of winter storm Fern, while distillate fuel demand jumped, Energy Information Administration data showed Wednesday (2/4).

Freezing temperatures forced shut oil rigs in parts of the country last weekend, with outages lasting several days. Averaged over the week ending January 30, crude oil output in the lower 48 states fell 482,000 bpd to 12.78 million bpd, according to the same data. 

Crude refining seems to have been much less affected by comparison. Net crude inputs dropped 180,000 bpd on the week, in line with seasonal norms as refiners are entering maintenance. At just over 16 million bpd, they continued to be unusually high for this time of year, up 4.5% year-on-year.

Weekly data also captured weather-induced demand spikes for diesel and heating oils. Distillate fuel oil inventories fell by 5.6 million bbl, while product supplied, a proxy for demand, jumped 6% from last week to 4.31 million bpd, some 7.8% higher than the four-week average. Heating oil remains an important source of heating in the Northeast of the country, which was hit the hardest by the winter storm.

In fact, while distillate fuel oil stocks dropped nationwide, the decline was most pronounced on the East Coast, where they declined 3.2 million bbl, down 9.3% in just one week. In contrast, regional gasoline inventories jumped by 2.5 million bbl as millions were shut in by snow storms.

While the effects of the winter storm may partially seep into next week’s data release, seasonally typical patterns are still likely to emerge.

Gasoline inventories have already continued to rise longer than usual as refiners ramped up operations to take advantage from high margins. Despite the jump in East Coast inventories, nationwide gasoline stocks were up only 700,000 bbl and are likely close to their seasonal peak as refiners enter maintenance.