US Oil Demand Reaches Highest Seasonal Level Since 2019 in July, EIA Data Reveals

U.S. Oil Demand Hits Seasonal Highs Amid Falling Production

U.S. oil demand experienced a notable increase in July, reaching the highest seasonal levels since 2019, while domestic oil output saw a decline for the second time in three months, according to data released by the U.S. Energy Information Administration (EIA).

Compared to other major consumers, particularly China, the U.S. demonstrated more robust oil demand in 2023, despite facing economic headwinds.

Total oil consumption rose by 1.2% from June, reaching 20.48 million barrels per day (bpd) in July. This marked the peak for that month since 2019. Specifically, demand for gasoline and ultra-low sulfur diesel also hit their highest seasonal levels since 2019, while jet fuel demand reached 1.83 million bpd, the most significant monthly figure since August 2019.

Conversely, U.S. oil production experienced a slight decline, with total output falling by 25,000 bpd from June to 13.205 million bpd in July. This drop has raised concerns among analysts and investors, who are closely monitoring production trends as record supplies from the U.S., combined with sluggish economic activity in China, have contributed to a downward pressure on oil prices this year. The U.S. had previously hit a monthly production record of 13.3 million bpd in December.

In Texas, the leading oil-producing state, output decreased by 34,000 bpd, bringing production down to 5.71 million bpd in July—the first monthly decline since January. Similarly, North Dakota, the third-largest oil producer, reported a production drop of 20,000 bpd to 1.16 million bpd, marking the lowest output since January.

In contrast, New Mexico, the second-largest oil producer in the U.S., saw an increase in production, rising by 25,000 bpd to reach a record 2.04 million bpd according to the EIA data.