JP Morgan Highlights Memorial Day Travel Effect on Global Oil Demand

Global oil demand improved from the previous week, driven by a rebound in U.S. oil consumption, bolstered by robust Memorial Day travel activities.

That’s what analysts at J.P. Morgan stated in a research note sent to Rigzone by the JPM Commodities Research team late Thursday, adding that, as of May 28, “the monthly expansion in global oil demand is tracking at approximately 400,000 barrels per day”. The analysts outlined in the note, however, that this expansion remains 250,000 barrels per day below their expectations.

“Consistent with our projections, global oil demand increased over the past week, reflecting heightened U.S. demand for gasoline and jet fuel due to Memorial Day weekend travel and the official start of the U.S. summer driving season,” the analysts said in the note.

“Concurrently, U.S. distillate demand surged as weekly container arrivals and port activity significantly improved, rising from 75.7 thousand containers to 102.8 thousand containers last week, according to data from the Port of Los Angeles,” the analysts added.

In a blog posted on the GasBuddy website on May 27, GasBuddy’s head of petroleum analysis, Patrick De Haan, highlighted that the U.S. average gasoline price “didn’t fall quite as far as anticipated for Memorial Day” but added that “it was still one of the most affordable since 2021 – and, when adjusted for inflation, among the cheapest in nearly a decade”.

Oil Inventories

The J.P. Morgan analysts went on to highlight in the research note that, in the fourth week of May, “visible OECD commercial oil inventories (including those in the U.S., Europe, and Singapore) rose by two million barrels”. The analysts said this rise was attributed to a four million barrel increase in oil product inventories, which they noted offset the two million barrel drop in crude oil stocks. Month to date, OECD stocks have expanded by 30 million barrels, the J.P. Morgan analysts highlighted in the research note.

“Globally, total liquid inventories edged up slightly from the previous week,” the analysts went on to state.

“Crude oil stocks fell by one million barrels, while oil product inventories increased by two million barrels. Month to date, global liquid inventories have risen by 63 million barrels, with crude oil stocks up by 67 million barrels,” they continued.

Previous Softening

In a research note sent to Rigzone by the JPM Commodities Research team on May 21, J.P. Morgan analysts said global oil demand had softened week over week, “primarily driven by a decline in U.S. oil consumption”.

“As of May 20, global oil demand has increased by 340,000 barrels per day, and remains nearly 300,000 barrels per day below our projections for the month,” the analysts stated in that note.

“Year to date, global oil demand is tracking a growth of 1.0 million barrels per day, which is 70,000 barrels per day below our revised growth expectations of 1.1 million barrels per day for the first five months of the year,” they added.

In that note, the analysts stated that this figure is significantly lower than the initial 1.3 million barrels per day growth projections made in the company’s 2025 outlook last November.

“This recent decline can be attributed to reduced U.S. trucking and freight activity, with container ship arrivals at the Port of Los Angeles plummeting by approximately 32 percent, according to port data,” the analysts said in that note.

“We believe this marks the peak of trade challenges and anticipate an improvement in container ship volumes in the coming weeks,” they added.

Inventory Rise

The J.P. Morgan analysts went on to state in that research note that visible OECD commercial oil stocks in the third week of May rose by 12 million barrels, with crude oil stocks rising by eight million barrels and oil product stocks climbing by four million barrels.

“Month to date, OECD commercial oil stocks have accumulated by 28 million barrels, marking a significant build in May, following a 19 million barrel draw in the first quarter of 2025 and a five million barrel draw in April,” the analysts stated in the note.

“Globally, total liquid stocks increased by 29 million barrels in the third week of May, following a 32 million barrel rise the previous week. Crude oil stocks saw a substantial increase of 27 million barrels, while observable oil product stocks grew modestly by two million barrels,” they added.

“Month to date, global liquid stocks have surged by 61 million barrels, largely driven by a 66 million barrel surge in crude oil stocks. Excluding China, global stocks have risen by 40 million barrels so far in May, with a 36 million barrel increase in crude oil stocks and a four million barrel rise in oil product stocks,” the analysts continued.

To contact the author, email andreas.exarheas@rigzone.com