Amid stronger domestic demand, gasoline exports dropped 15.1% in May from April, to average 343,000 barrels a day. Exports dropped 23.3% from a year earlier, to the lowest level since July 2011. Exports to Mexico, which make up half of U.S. gasoline exports, dropped by more than 100,000 barrels a day from a year earlier, to 172,000 barrels a day, the lowest level since October 2010. May demand for distillate fuel increased 2.4%, or 88,000 barrels a day, from a year earlier, at 3.745 million barrels a day. That's the highest since February and a three-year high for May.
The bulk of the rise in distillate use came in demand for ultra-low sulfur diesel, used to run trains and trucks, which rose 77,000 barrels a day, or 2.3%, from a year earlier, to 3.445 million barrels a day. That figure is the highest ever in May and the most since November 2011.
Retail diesel prices in May averaged $3.979 a gallon, 1.7% below a year ago and lowest monthly average since February. Demand for jet fuel fell 1.4% from a year earlier, and was the weakest in May since 2009. But, at 1.409 million barrels a day, jet fuel use was the highest in any month since November 2011.
Demand for heavy residual fuel oil, used in industrial boilers and for power generation, continued its steep decline amid strong competition from natural gas on environmental and economic factors. Residual demand of 294,000 barrels a day in the month was the lowest on EIA records beginning in 1936 and was 38.5% below a year earlier.
While the recent break in oil prices helped spur gas demand, it did take a toll on profits for some oil companies, especially BP. Dow Jones reported that BP posted a dramatic fall of 96% in adjusted profit for the second quarter as it wrote down the value of its assets by $5 billion, including some U.S. refineries, a suspended Alaskan oil project and U.S. shale gas resources. Excluding these one-off costs, analysts said the company's performance was still weak as it continues to suffer the long-term effects of the Deepwater Horizon oil spill. BP shares dropped sharply in morning trade after the company said its replacement cost profit, a headline figure that strips out gains or losses from inventories, fell to $238 million, from $5.41 billion in the same period in 2011. The London-based energy giant's bottom line made for even more somber reading as it posted a net loss of $1.39 billion, compared with a net profit of $5.72 billion a year earlier.
Now perhaps some of the politicians that whine that oil companies make obscene profits should realize that what goes up can come down. Maybe we should lower oil company’s taxes. It is only fair to call for a cut in oil company tax because when their profits are high politicians call to raise their taxes.