The gas-guzzling heyday of the world’s largest oil market is receding as extra environment friendly automobiles, the arrival of mass-market electrical autos and the rise of working from dwelling immediate US motorists to burn much less petrol.
The 8.78mn barrels a day of petrol consumed within the US final yr was 6 per cent decrease than file volumes offered earlier than the coronavirus pandemic. Consumption will proceed to say no in 2023 and 2024, the US Energy Information Administration forecast on Tuesday.
US petrol accounts for about 9 per cent of world oil use. The prospect of stagnant or falling demand holds broad implications for vitality markets and carbon emissions.
“The consensus is we are not going to get back to pre-Covid levels of consumption,” mentioned Robert Campbell, head of vitality transition analysis at consultancy Energy Aspects. “That matters because US gasoline is the world’s largest single market for an oil product. It dwarfs any other national gasoline market in the world.”
Petrol consumption has been decrease yr on yr in each month since June, pushed partly by a burst of file excessive gasoline costs after Russia launched its full-scale invasion of Ukraine.
US motorists are driving barely lower than earlier than the pandemic. Vehicle miles travelled — a measure of highway visitors volumes — have been about 90 per cent of early 2020 ranges in January, in keeping with Inrix, which tracks mobility knowledge.
The decline is basically because of much less driving in cities, the place working from dwelling stays well-liked. About half of US workers in jobs that could possibly be carried out remotely have been engaged on a hybrid foundation final yr, in keeping with a current Gallup ballot. Miles travelled in San Francisco have been nonetheless lower than 60 per cent of pre-Covid-19 ranges final autumn, Inrix knowledge confirmed.
“Travel patterns have changed,” mentioned Bob Pishue, transportation analyst at Inrix. “The closer you are to dense urban cores, the less travel there is.”
More necessary, the gasoline financial system of automobiles elevated on common by a few third — or 6 miles a gallon — between 2004 and 2021, in keeping with the Environmental Protection Agency, driving down related carbon emissions by 1 / 4. The positive aspects got here within the wake of stricter rules imposed by the administration of Barack Obama. Joe Biden’s administration has tightened them additional.
“Fuel economy, every month, every year has been getting more efficient,” mentioned Jeff Barron, a petroleum analyst on the EIA. The statistics company’s long-term outlook to 2050 doesn’t foresee petrol consumption returning to pre-pandemic ranges.
Better effectivity within the highway fleet will in 2023 avert greater than 150,000 b/d of petrol demand progress in OECD nations within the Americas, of which the US is by far the largest oil shopper, the International Energy Agency mentioned. What it referred to as “burgeoning sales of electric vehicles” will save roughly one other 50,000 b/d.
“The heyday of gasoline is over,” mentioned Alan Struth, an analyst at S&P Global Platts.
US oil refiners have acknowledged the development. Marathon Petroleum lately estimated consumption was off by 3 per cent from pre-Covid-19 ranges, a stage that was “probably pretty sticky”, Brian Partee, the corporate’s senior vice-president, mentioned lately.
But refiners and lots of analysts consider that demand will nonetheless develop for different petroleum merchandise. One space of focus is the petrochemical sector, the place low cost electrical energy provides the US an enormous benefit over different components of the world.
“In the aggregate, total US [oil] demand doesn’t look like it’s peaked,” Struth mentioned. “It’s close; It’s getting there; and it will, probably by the time you look at ‘25 or ‘26.”
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