(Repeats with no changes to text. John Kemp is a Reuters market
analyst. The views expressed are his own.)
* Chart 1: tmsnrt.rs/2n74kSu
* Chart 2: tmsnrt.rs/2n7eGlm
* Chart 3: tmsnrt.rs/2oV6ZeF
* Chart 4: tmsnrt.rs/2nXYPo6
* Chart 5: tmsnrt.rs/2oERCHF
* Chart 6: tmsnrt.rs/2n7hajG
By John Kemp
LONDON, April 4 Growth in U.S. gasoline
consumption is slowing after two years of brisk increases
between the middle of 2014 and the middle of 2016.
The average fuel economy of vehicles on U.S. roads is
improving, as a result of federal regulations, which is
offsetting the continued growth in driving.
U.S. refiners and fuel blenders supplied an average of 8.5
million barrels per day (bpd) of motor gasoline to domestic
consumers in January, according to the U.S. Energy Information
The volume of gasoline supplied was down by almost 170,000
bpd compared with the same month a year earlier and 70,000 bpd
below the 10-year average (tmsnrt.rs/2n74kSu).
Lower gasoline sales contributed to the unusually rapid
accumulation of gasoline stocks in the first few weeks of 2017.
Stocks held by refiners and motor fuel blenders increased by
20 million barrels during January, almost double the normal
seasonal rise of 11 million barrels (tmsnrt.rs/2n7eGlm).
The decline was probably an anomaly caused by poor weather
and the timing of public holidays, and is likely to be reversed
in future months.
Nonetheless, the rate of growth in gasoline consumption has
been slowing since the second quarter of 2016 (tmsnrt.rs/2oV6ZeF).
Motor gasoline sales have been flattening even though the
number of miles driven has continued to rise fairly steadily (tmsnrt.rs/2nXYPo6).
U.S. motorists drove 2.2 percent more miles in January
compared with the same month a year earlier, according to the
Federal Highway Administration (tmsnrt.rs/2oERCHF).
Since the drop in oil prices in 2014 and 2015, U.S.
motorists have increasingly opted for larger and more
fuel-hungry sport-utility vehicles, crossover utility vehicles
and other light trucks.
So the mix of new vehicles sold has become less
fuel-efficient than was projected a few years ago as more light
trucks are sold and fewer cars.
But both light trucks and passenger cars have become much
more fuel efficient than the old vehicles they are replacing (tmsnrt.rs/2n7hajG).
Light trucks produced in 2016 were required to achieve a
volume-weighted average fuel economy of 28.8 miles per gallon
(mpg) in test conditions, up from just 21.6 mpg in 2006.
Cars produced in 2016 were required to achieve a
volume-weighted average of 37.8 mpg, up from 27.5 mpg in 2006.
Critically, the fuel-economy standard for light trucks in
2016 (28.8 mpg) was tougher than the standard for passenger cars
in 2006 (27.5 mpg).
In practice, the fuel-economy of both cars and trucks has
increased even faster than mandated by federal regulations as
manufacturers have responded to demands from customers.
As a result, the average vehicle being driven on U.S.
highways is becoming steadily more fuel efficient as old cars
and light trucks are retired and replaced by newer models.
The average age of passenger cars and light trucks on U.S.
roads is more than 11 years old, according to the U.S. Bureau of
Tougher fuel economy standards started to phase in from
around 2010 and the boom in auto sales in recent years has
accelerated fleet turnover.
Fuel-efficient vehicles have arrived on U.S. roads in record
numbers and the improvement in fleet-wide fuel economy is now
starting to blunt demand for gasoline despite increased driving.
The average fuel efficiency of all cars and light trucks on
U.S. roads is projected to increase from 21.8 mpg in 2015 to
22.5 mpg in 2017 and 23.3 mpg by 2019 (“Annual Energy Outlook”,
Partly as a result, the EIA forecasts gasoline consumption
will decline by about 40,000 bpd in 2017 after rising by 150,000
bpd in 2016 and 260,000 bpd in 2015 (“Short-Term Energy
Outlook”, EIA, March 2017).
Stagnating gasoline sales at home will leave U.S. refiners
increasingly dependent on pushing up exports to Latin America
and other emerging markets to boost revenues.
(Editing by Edmund Blair)