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The U.S. summer driving season typically spans from April to late-September. More drivers historically hit the road with spring and summer holidays, helping boost domestic gasoline demand. EIA’s preliminary weekly data shows gasoline demand in early July was up ~430 kb/d compared to March’s average demand level. This is slightly more than the seasonal average change for the period (+315 kb/d). The boost has been helped by a record number of people traveling. AAA estimated that a record number of people traveled over Memorial Day and July 4th holidays. 61.6 million people were projected to travel by car over July 4th– the highest volume for any period on record. The U.S. driving season has typically peaked in July or August before slowing in September.
The U.S. oil and natural gas industry uses both domestic and imported steel products in its operations. In 2024, the U.S. oil and natural gas industry imported $4.1 billion of casing, drill, line, and pipe tubing. Most of these imports came from South Korea (24%), Canada (11%), Japan (10%), and Mexico (8%). Many of these products are specialized with few or no domestic substitutes.
The Trans Mountain pipeline expansion added 590 kb/d of crude oil takeaway capacity between Canada’s oil producing fields in Alberta and the Port of Vancouver on the west coast. The expanded pipeline began ramping up in May 2024 and has eased takeaway constraints and opened new export markets. Canada exported nearly 400 kb/d to non-U.S. markets in January-April 2025, up from ~80 kb/d a year ago. Western Canada Select (WCS) crude oil typically sells at a discount to WTI due to quality differences and transportation bottlenecks. In the past 5 years the discount has been as wide as $30/bbl. The discount remains near $10/bbl despite record exports to non-U.S. markets due to crude quality differences.
Oil and natural gas production requires constant investment and development. Without new drilling, crude oil production can quickly decline. For example, in the Gulf of America, if all new drilling stopped, crude oil production could decline from 1.8 mb/d in 1Q2025 to 1.1 mb/d by 4Q2028, according to Rystad data. This is a 38% decline in less than 4 years. U.S. EIA estimates that many of the new fields in deepwater Gulf of America ramp up production over ~2 years, maintain peak production levels for ~4 years, and then decline at ~10% per year. Onshore U.S. shale production has a much steeper decline curve where production in a new well peaks in the first month and declines by ~70% in the first year.
California’s retail gasoline prices have historically exceeded the U.S. average, but its premium has grown over time. Gasoline is now $1.3/gal more in California than the national retail average, up from just a $0.30/gal premium in 2005-2014. California’s higher gasoline prices are driven by higher state taxes, environmental programs and fees, special fuel blending requirements, and its isolated market.
The U.S. produced 2.8 mb/d of ethane in 2024, up 1.0 mb/d or 55% since 2019. This is faster growth than U.S. crude oil production, which increased by 0.9 mb/d over the same period. Around 80% of U.S. produced ethane is used domestically and ~20% is exported. The U.S. is the only major waterborne exporter of ethane in the world. Ethane is a petrochemical feedstock used primarily for plastics manufacturing. Over the past year, nearly half of U.S. ethane exports went to China and 19% to the EU and UK.
China’s EV market has grown rapidly. Five years ago, EV’s accounted for ~5% of China’s vehicle sales and now they account for >50%. The number of EVs sold in China is quickly approaching the total number of vehicles sold in the U.S. The ramp up of China’s EV market is expected to bring a peak in domestic gasoline demand. However, total oil demand continues to grow in China due to a growing petrochemical sector and rising jet fuel demand.
LNG tankers are highly specialized vessels that use cryogenic tanks to maintain very low temperatures to keep the natural gas liquified. At the end of 2024, there were 742 active LNG tankers according to the IGU 2025 LNG report, with 75% built in South Korea, 15% in Japan, and 7% in China. An additional 337 tankers have been ordered for delivery by 2031 with a record 101 vessels expected to be delivered in 2026. The U.S. built several LNG tankers in the 1970’s, but most have been scrapped or are at the end of their lifespan.
New Mexico’s crude oil production rose to a record high for a second consecutive month in March 2025, growing by 100 kb/d from February to 2.26 mb/d. New Mexico’s crude oil production has more than doubled since 2019 with 80% of the growth occurring on federal lands in Lea and Eddy Counties. Nearly 70% of New Mexico’s crude oil production occurs on federal land vs. 27% of total U.S. crude production.
U.S. production of crude oil, natural gas liquids (NGLs), and dry natural gas all set records in March 2025 and surpassed EIA’s forecast from its May Short-term Energy Outlook (STEO). U.S. crude oil and NGL production rose by a combined 632 kb/d from February levels and were up 811 kb/d from a year ago. Meanwhile, dry natural gas production rose by 2.3 bcf/d to 107.3 bcf/d, a level not reached in EIA’s forecast until late-2026. New Mexico led the crude oil production growth while Louisiana led the dry natural gas production growth.
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