Blog March 20, 2019

A massive “bomb cyclone” storm clipped U.S. and regional gasoline demand for week ending March 15, as the inclement weather across portions of the Rockies and Midwest inhibited vehicle travel. Gasoline demand started the week off strong with many schools in the U.S. on spring break, but the early week gains were offset by the storm’s impact on travel, especially in PADD 2 and PADD 4.

Temperature differential in the mid-levels of the atmosphere
Temperature differential in the mid-levels of the atmosphere. Areas in the pink and blue colors correspond to temperatures 5-20 degrees below zero. (Source: The Weather Channel)

Winter storm Ulmer developed over the western U.S. on Tuesday, March 12, and underwent “bombogenesis,” a process where a storm’s pressure drops more than 24 millibars in less than 24 hours, becoming a “bomb cyclone.” The storm hit western states on Wednesday, March 13, and the Midwest/Chicago region on Thursday, March 14, leading to lower gasoline demand for the latter half of the week. Ulmer led to the closure of hundreds of miles of interstate roads in the upper Plains and stranded more than 1,000 motorists in the region, according to The Weather Channel.

Genscape Weekly Gasoline Demand Report
Graph 1: Genscape Weekly Gasoline Demand Report, 2019 vs. 2018

U.S. total weekly gasoline demand averaged 9.331mn bpd for week ending March 15, according to our Weekly Gasoline Demand Report, down 0.6 percent from the previous week. Gasoline demand for the week fell more than 2 percent year-over-year as the massive low-pressure system brought blizzard and flooding conditions across the Rockies, Central Plains, and Midwest regions (PADD 2 and PADD 4), a difference of more than 200,000 bpd. Gasoline demand in 2019 generally trended below 2018 levels through mid-March.

Regional Gasoline Rack Activity
Graph 2: Regional Gasoline Rack Activity for Week Ending March 15, Supply Side Data

Our Supply Side Data showed total motor gasoline rack activity was initially up around 30 percent week-over-week in PADD 2 and PADD 4 on Saturday, March 9, as some motorists filled up ahead of the spring break holiday. In preparation for the winter storm to hit on Wednesday, demand in PADD 4 increased on March 12 to a midweek high of 4 percent week-over-week before plummeting 27 percent on March 13 as the storm brought a record-low pressure system and blizzard conditions to the region. PADD 4 rack activity remained low on Thursday, March 14, in the wake of the storm. PADD 2 rack activity did increase slightly earlier in the week ahead of the storm, and demand for March 14 decreased 13 percent week-on-week as the storm brought flooding and tornado conditions to several states in the upper Midwest.

State-level week-on-week gasoline demand percent change
Graph 3: State-level Week-on-Week Gasoline Demand Percentage Change
State-Level Gasoline Demand Volumes
Graph 4: State-level Gasoline Demand volumes

In the affected states, demand data showed similar activity to PADD-level data. Demand volumes were high Friday , March 8, and Saturday, March 9, ahead of spring break week and built again in the days before the storm hit each area. Demand quickly fell off as the storm hit. Heaviest-hit states, like Colorado and Minnesota, saw fairly drastic changes in volume and week-on-week change across the week.