Marine shipping activity and residual fuel oil demand were supported by US importers who were building inventory ahead of the holiday season. This activity was also supported by efforts to deal with escalating tariffs from the trade war between USA and China. However, marine shipping was slow in October, while the Baltic Dry Index was less by 5.5% between September and October.
According to American Petroleum Institute (API), US petroleum demand in October was 20.8 million barrels per day (mb/d). This was the strongest for the month since 2006. Other US records for October included:
- Demand for gasoline (9.5 mb/d);
- Refining and petrochemical demand for liquid feedstocks, naphtha, and gasoil (“other oils”, 5.1 mb/d);
- Refinery throughput (16.6 mb/d).
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The US also produced 11.2 mb/d of crude oil and 4.5 mb/d of natural gas liquids in October, thus meeting all global oil demand growth so far in 2018.
What is more, in October, US petroleum exports increased for a second month in a row since a setback in August, when China stopped buying US crude oil. However, with US oil prices over $9.00 per barrel below international levels, the European Union, Japan, Mexico, and Canada in total increased their purchases of US crude oil and refined products.
In addition residual fuel oil, which is used in electric power production, space heating, marine vessel bunkering and other industrial applications, was 297 thousand barrels per day (kb/d) in October. This is a decrease of 14.7% from September and 8% less than October 2017.
Finally, marine shipping activity and residual fuel oil demand were helped by US importers’ inventory building ahead of the holiday season as well as attempt to mitigate trade war tariffs.
Nevertheless, marine shipping was slow in October, and the Baltic Dry Index reduced by 5.5% between September and October.
