Transportation Fuels First Look - US Gasoline Demand Hits a Plateau, Signaling Long-Term Shift

• Scroll down for a chart of the RBOB-WTI crack spread, a measure of refinery margin. It shows elevated cracks this year
• Total motor gasoline inventories rose by 0.8 MMBbl for the week ending September 1 and are 2% below the five-year average for this time of year

• Gasoline demand in the US has dropped 4% from its 2018 peak, despite Americans driving nearly as much as they did pre-pandemic
• Declining population growth, an aging demographic, and improving fuel efficiency have all contributed to reduced gasoline consumption
• Electric vehicles and hybrids are gaining market share, while stricter fuel efficiency standards continue to undercut demand
• Globally, gasoline demand is facing structural decline, with the US playing a pivotal role in shifting markets toward a long-term plateau or gradual reduction in consumption, creating new challenges for oil producers and refiners

• Scroll down for a chart of the NY Harbor ULSD-WTI crack spread, a measure of refinery margin. It shows elevated cracks this year
• Distillate fuel inventories fell by 0.4 MMBbl for the week ending September 1 and are about 10% below the five-year average for this time of year

Diesel Market Faces Strains in Asia as Chinese Demand Contracts (Bloomberg)

• Diesel demand in Asia, driven by China and India, is facing significant headwinds, with refining margins for turning Dubai crude into diesel down over 40% this year, reflecting broader market weakness 
• China's diesel consumption has declined by over 10% due to economic slowdown and increasing use of natural gas and electric vehicles, marking the first full-year contraction in three years
• Meanwhile, India's diesel demand growth has slowed to 2.4% in 2024 from 6.7% in 2023, driven by stricter emissions norms and shifting consumer preferences toward electrification