Don't Say Oil Demand in the U.S. has Peaked

Amid all the bearishness of oil markets--the benchmark U.S. light sweet crude price on CME Wednesday declined $1.82 to $40.80/b, the lowest for the front-month contract since March 2009--data released by the US Energy Information Administration (EIA) was distinctly bullish in one sense.

The Energy Information Administration reported Wednesday that U.S. demand--known formally in the data as "Products Supplied"--was 21.397 million in the week ended August 14. That's the highest in the post-Great Recession era; it's the highest weekly number since the end of 2007.

A word of caution: the weekly numbers on supply and demand from the EIA have long been considered notable, but hardly a final word. The monthly numbers are considered more accurate, simply because there's greater time for the EIA to review the data (though those figures have their critics also).

And in fact, the monthly Product Supplied number for May, which came in at about 19.1 million b/d, was considerably less than the average of the weekly numbers reported during May. The monthly number came out in July, so there was more time for EIA analysts to review different data sets. (by John Kingston, Market Insights)