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The EIA Weekly Petroleum Status Report released on Wednesday shows total US product supplied at 19.794 million bpd over the four-week period ending April 30th, the highest four-week average for US “demand” since the recovery began in the 2Q of 2020. While up only marginally from the previous week, the latest four weeks represents an improvement of 5.04 million bpd, or 34.2% versus the year earlier period (see below). US gasoline demand was up 56.2% during the same four-week window while distillate demand was 34.9% higher and jet demand was up 100.8%.

The year-on-year comparisons are an extreme perspective, given it is measured against the period of peak pandemic demand collapse from April 2020. A more useful frame of reference would be a comparison to a more “normal” period, or April of 2019 (see below). During the same four-week period in 2019 US demand averaged 20.225 million bpd, so demand remains at a deficit to “normal”. 

That said, the demand deficit vs 2019 has dissipated quickly, from 10.93% in mid-March to 2.13% at the end of April. This translates to about 431,000 bpd less demand versus the April 2019 comp period. We would argue that demand recovery is further along than expected. We also expect US demand to outperform as shifting COVID vaccine dynamics gets folks out of shutdown and back on the road over the next few months, for both work and leisure. 

High retail fuel prices and still firming CME cracks spreads for both diesel and gasoline signal the demand driven nature of upward momentum in crude this week. Unsurprisingly, rolling prompt month gasoline and diesel crack spreads made new multi-month and multi-year highs respectively this week, as USGC refiners continue to struggle with their post freeze operational recovery. US demand recovery is simply coming faster than the completion of needed refinery work. Wide crack spreads have significant implications for crude over the next two to three months as they will provide even more momentum to the normal seasonal surge in US refinery activity from April.