EIA raises US gasoline demand outlook by 100,000 b/d for 2021 on economic activity

Washington — The US Energy Information Administration May 11 raised its outlook for US gasoline demand by 100,000 b/d to 8.7 million b/d for 2021 on a recent uptick in driving activity and an improved economic forecast.

Increased summer travel comes just as the US South and East Coast are facing potential fuel shortages as Colonial Pipeline works to restore service after a ransomware attack forced it to halt operations for several days.

Colonial said it hopes to have the pipeline substantially back online by the end of the week as it restarts one segment at a time. The system is the primary artery for gasoline and refined products for much of the South and East Coast, delivering more than 100 million gal/d of fuels.

EIA said it was closely monitoring the outage, which happened after it completed modeling and analysis for the May Short-Term Energy Outlook.

EIA expects US gasoline consumption to average nearly 9 million b/d during the summer driving season (April-September), which is 1.2 million b/d above last summer but still 600,000 b/d below summer 2019 levels.

US gasoline demand is expected to average 8.92 million b/d in 2022, EIA said.

India's risk to demand outlook

EIA kept its outlook for 2021 global liquid fuel demand largely unchanged from last month at 97.7 million b/d, but it raised 2022 global demand 100,000 b/d to 101.4 million b/d.

That would put global oil demand growth at 5.4 million b/d in 2021 and 3.7 million b/d in 2022. Global oil demand shrank by 8.6 million b/d in 2020 because of the coronavirus pandemic.

But Asian oil demand presents a downside risk to the forecast, with India, the world's third top oil consumer, battling a surge in coronavirus cases.

"The degree to which the increase in cases will affect oil demand is currently unclear," said EIA, which cut its India demand outlook by 300,000 b/d for the second quarter. "This forecast is highly uncertain, as future case counts and their effect on mobility is unclear."

EIA adjusted its 2021 crude oil price forecast by a few cents, to $62.26/b for Brent and $58.91/b for WTI. It raised its 2022 average to $60.74/b for Brent and $56.99/b for WTI, both up 25 cents from last month's outlook.

US oil production is expected to average 11.02 million b/d in 2021 and 11.84 million b/d in 2022, both trimmed 20,000 b/d from last month's outlook.

EIA estimates US crude production rose to 11 million b/d in April, from 10.9 million b/d in March and 9.9 million b/d in February, when a severe cold snap shut wells in Texas.