EIA: U.S. diesel demand for March hits 26-yr seasonal low
HOUSTON (Reuters)—U.S. diesel demand fell to its lowest seasonal level in March since 1998, while crude oil output rose to a multi-month high, according to data from the U.S. Energy Information Administration (EIA).
Demand for distillate fuels, which includes diesel and heating oil, has been hit sharply this year under pressure from sluggish manufacturing activity, milder-than-expected winter weather and booming renewable fuel supply.
Products supplied of distillate, EIA's measure of demand, fell > 6% from February to 3.67 MMbpd in March, lowest for the month since 1998.
The two most immediate U.S. ultra-low sulfur diesel futures contracts settled in the steepest contango since 2020 on Friday. A market is in contango when prices for commodities are lower now than for future deliveries.
U.S. crude oil output rose by 0.6% to 13.2 MMbpd in March, the highest since December, the data from EIA showed. Output from Texas, the top producing state, edged 0.7% higher to 5.6 MMbpd in March, also the highest since December.
Production in New Mexico, the second largest producer, grew by 1.6% to 2 MMbpd to its highest on record for a second straight month. Crude production in North Dakota, however, fell by 2.7% to 1.2 MMbpd to its lowest since January.
Meanwhile, total product supplied of oil and petroleum products fell 0.4% to 19.9 MMbpd. Finished motor gasoline supplied rose 3.3% to 8.9 MMbpd. Gross natural gas production in the U.S. Lower 48 states fell by about 3.0 Bft3d to 114.7 Bft3d in March, down from 117.6 Bft3d in February, according to EIA's monthly 914 production report.
That compares with a monthly record 118.2 Bft3d in December.
In top gas-producing states, monthly output in March held steady in Texas at 34.6 Bft3d, and fell 9.0% in Pennsylvania to 19.4 Bft3d. That compares with monthly record highs of 35.0 Bft3d in Texas in December 2023 and 21.9 Bft3d in Pennsylvania in December 2021.
(Reporting by Arathy Somasekhar and Georgina McCartney in Houston, Scott DiSavino and Shariq Khan in New York; Editing by Marguerita Choy)
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