U.S. Energy Information Administration numbers for April released Friday got less than the usual scrutiny because of the imminent holiday weekend.

However, in an analysis published this morning, the commodities team at Citi called the upward revisions to demand “startling” while ceding that the data is much more consistent with U.S. economic conditions. The bank also observed the month-on-month cutback in drilling, but indicated that they still expect that U.S. crude oil output will break the all-time record level of 13.1 million b/d established three years ago.

The monthly numbers for demand saw a total upward revision of 350,000 b/d across the spectrum of marquee products. Gasoline demand was revised higher by about 100,000 b/d while distillate demand was increased 120,000 b/d; with a 60,000 b/d hike in jet fuel; 10,000 b/d in jet fuel and a revision of 60,000 b/d for propane and propylene. Analysts are somewhat dismissive of the upward revision of 510,000 b/d for “other oils” because of historical inconsistencies in reporting.

When all of the upward revisions are tallied, demand for gasoline, distillate, jet fuel, residual fuel, propane and “other oils” adds up to 800,000 b/d more product finding a home than the weekly numbers from April implied.

Citi cites multiple “unknowns” going forward for both supply and demand. But they believe that despite a decline in rig utilization, the higher utilization of frack crews, considerable efficiency gains, and an increase in re-fracking older wells all point to higher production. Citi now suspects that 2024 crude oil production growth will be less robust than in previous forecasts, but still looks for a 200,000 b/d gain next year.

EIA’s April crude production number was on the mixed side. At 12.6 million b/d, it was 325,000 b/d higher than the weekly numbers, but it included a 100,000 b/d decline in crude oil field production, accounting for the month-to-month drop from 12.7 million b/d.
Source: Dow Jones, OPIS