By Shariq Khan
NEW YORK (Reuters) - A string of dramatic revisions to official U.S. oil consumption data have unnerved market participants who rely on the figures to trade.
Traders and analysts watch weekly and monthly supply and demand data from the U.S. Department of Energy's statistical arm, which given the U.S. is the top producer and consumer of crude and fuel can influence decisions affecting billions of dollars of energy flows.
The releases also inform everything from policy decisions in Washington to how much OPEC+ members will produce.
The statistical arm of the Department of Energy, the U.S. Energy Information Administration, published a monthly update last week that showed U.S. oil consumption at a seasonal record in May as motorists burnt more gasoline than even before the pandemic.
That data conflicted with weekly updates published that month showing oil and fuel demand struggling to even match last year's levels. [EIA/S]
It is not unusual for monthly data - which is released with a two-month lag - to differ from preliminary weekly data by around 100,000 to 200,000 barrels per day (bpd), relatively marginal changes in a market that consumes 20 million bpd.
However, recent revisions have painted two starkly different demand pictures.
May's weekly data, for example, suggested U.S. gasoline consumption was just over 9 million bpd in May, compared with over 9.1 million last year - which traders took as a sign that electric vehicles, hybrids and more efficient engines were curbing motor fuel use.
Separately, the Petroleum Supply Monthly update published last week, however, showed U.S. gasoline consumption in May was nearly 400,000 bpd higher than that, and topped 2019 levels despite higher fuel costs.
That, and revisions to other products, flipped the tally of U.S. oil demand to a seasonal record of 20.8 million bpd in May, 800,000 bpd higher than the weekly estimates. Similarly in April, oil demand was revised higher by 400,000 bpd from the weekly estimates.
The EIA says the weekly figures for May were off because preliminary readings overestimated gasoline output and undercounted exports. The agency does not expect weekly estimates to be as accurate as monthly data, but to be consistent in showing general trends.
The EIA is always working to align its weekly and monthly data more closely and has made several changes to both in an effort to better reflect the petroleum market, a spokesperson said.
'A LITTLE CONCERNING'
Despite those efforts, however, the large revisions in recent months are eroding the market's confidence in the reliability of the data, long-time markets observers said.
"It makes you wonder why anyone is paying attention to the weekly numbers," said Tom Kloza, head of energy analysis at Oil Price Information Service (OPIS). Many fuel marketers have expressed disbelief over the revisions the EIA made to its numbers in May, he added.
OPIS publishes its own estimates of gasoline demand using data from around a quarter of the more than 150,000 retail fuel distribution sites in service across the country. That data has consistently showed year-on-year demand deteriorating, aligning more closely with the EIA's original estimates for May.
Data from GasBuddy.com, a widely used fuel price tracking service, also aligns more closely with the earlier weekly estimates. GasBuddy's data for May pegs gasoline demand at 8.87 million bpd, close to the EIA's weekly estimates from the time.
A trader at one of the largest commodities distribution firms said the revisions left them befuddled, and warned such changes could ultimately hurt consumers as decisions on how much fuel to import are influenced by the EIA data.
To be sure, traders subscribe to dozens, if not hundreds, of private data feeds in addition to government data. Some even charter their own helicopters to fly over storage tanks and estimate how much oil has moved in and out of them across trading hubs.
The U.S. EIA is the only government agency that issues such granular and periodical updates on consumption. While the revisions raise questions around reliability, most market observers say they consider the EIA's data an unbiased overview of the market at a time that the other two large energy reporting agencies - OPEC and IEA - are further apart than ever on the direction of oil markets.
"It's a trend that's a little concerning to me," GasBuddy analyst Patrick De Haan says.
"The EIA has been the bedrock for analysts, but skeptics may be gaining more validity to arguments that the EIA numbers aren't jiving to the real world."