Weekly U.S. oil demand data by the Energy Information Administration (EIA) has been significantly overestimated compared to the final monthly oil demand, oil data analytics firm OilX said on Friday.
“US weekly data significantly overestimated total monthly oil demand, not just in other oils, but also for road fuels,” OilX said in a post on Twitter.
The weekly demand estimates in March already showed that recent demand strength has been easing off, according to the analytics company.
“This may turn out even weaker if recent errors vs monthlies continue in a similar fashion,” OilX noted.
EIA’s petroleum supply monthly, published on Thursday, showed that total product supplied—the proxy for total oil demand—averaged 19.731 million barrels per day (bpd) in January.
EIA’s weekly data pegged American oil demand at a much higher level—21.7 million bpd.
“While weekly data pegged demand at 21.7m b/d, the monthly data cuts it back almost two million barrels a day to 19.73m b/d,” Javier Blas, energy and commodities columnist at Bloomberg, said on Thursday, also noting the “huge downward revision to U.S. oil demand for January 2022.”
The downward revision could be a sign that demand was not as strong as many analysts believed earlier this year.
In the latest weekly assessment, the EIA estimated that gasoline demand alone fell from 8.63 million bpd to 8.5 million bpd last week.
“The drop in gas demand, alongside growth in total stocks, contributes to price decreases. If demand continues to decline as gasoline stocks continue to build, the national average will likely continue to move lower,” AAA said on Thursday, noting that gasoline prices have fallen this week slightly.
“The downdrafts will continue as oil drops after the SPR announcement,” GasBuddy’s head of petroleum analysis, Patrick De Haan, said on Thursday after the U.S. announced the largest-ever SPR release. “Nearly all states will see falling #gasprices over the next week and potentially beyond,” De Haan added.