US fuel oil demand close to record lows in January - API

US residual fuel oil demand slumped last month and it was the third lowest demand for the month of January since 1936, according to the American Petroleum Institute (API).

PHOTO: Oil refinery complex with big American flag displayed, and fumes coming out from the chimney. Getty Images

Residual fuel oil deliveries, or implied demand, declined to 288,000 b/d this January – a 14% drop from a year earlier. But it was still a 36% leap up from a month earlier in December.

The year-on-year drop in fuel oil demand coincided with a continuous drop in container shipping activity, which declined to pre-pandemic levels in January, the API says.

The 10 biggest ports in the US saw a year-on-year decline of about 18% in inbound container volumes in January, which was slightly bigger than the 17% year-on-year drop recorded in December, shipping expert John D. McCown says.

Inbound container volumes in US West Coast ports declined by a massive 24% on the year in January, followed by 13% drops in East Coast and Gulf Coast ports, McCown adds.

In addition to bunkering, residual fuel oil is also used for power generation, heating and industrial processes, API points out.

Despite weaker demand, US residual fuel oil production grew to 275,000 b/d this January – compared to 263,000 b/d a year earlier.

By Nithin Chandran

Please get in touch with comments or additional info to news@engine.online