Recent data revisions by the U.S. Energy Information Administration (EIA) have caused significant disruption and confusion among oil market analysts and traders. The discrepancies between the weekly and monthly data reports have resulted in conflicting narratives about the state of American oil and gasoline demand.

The EIA's weekly data releases for May initially depicted a scenario of modest U.S. gasoline demand, contributing to a decline in international oil prices and fuelling concerns about demand in the world's largest oil consumer. However, the monthly update for the same period, published with a two-month lag, portrayed a significantly higher implied gasoline and overall oil demand.

This substantial upward revision stunned market watchers who rely on the weekly data for trade signals and demand outlooks. The divergence was so pronounced that it suggested two conflicting narratives about U.S. oil demand. According to Shariq Khan from Reuters, the discrepancy arose from an overestimation of gasoline output and underreported exports.

The EIA's official response to these discrepancies has been to emphasize that weekly figures are preliminary and more prone to error compared to the comprehensive monthly reports. The agency has made various changes to align the weekly and monthly data more closely, striving to reflect the actual state of the U.S. petroleum market more accurately.

This effort to provide general trends in demand has not quelled the concerns among market participants. For instance, while the weekly data suggested a weak start to the summer driving season with demand lagging behind the previous year, the monthly report indicated that May saw the highest gasoline demand since August 2019. The EIA's Petroleum Supply Monthly stated that America's total crude oil and petroleum products supplied reached 20.8 million barrels per day (bpd) in May, the highest-ever for that month and the highest since August 2023.

Market analysts such as Patrick De Haan from GasBuddy have expressed reservations about the EIA's data revisions. According to De Haan, the GasBuddy data, which estimates May's gasoline demand at 8.87 million bpd, is more in line with the EIA's weekly estimates than the monthly report. This sentiment is echoed by analysts at Oil Price Information Service (OPIS), whose data aligns more closely with the initial weekly estimates from the EIA.

The inconsistencies raise broader concerns about the reliability of the data, which is critical for making informed decisions that impact billions of dollars in energy flows. With the U.S. being a major producer and consumer of oil, the data from the EIA influences everything from policy decisions in Washington to production levels of OPEC+ members.

Veteran market observers like Tom Kloza from OPIS are worried that such large revisions could erode confidence in the reliability of the EIA's data. Long considered a bedrock for analysts, skepticism toward the EIA's numbers seems to be gaining traction, potentially giving validity to concerns that the data is not reflective of real-world scenarios.

The concerns are not merely academic. Traders at large commodities distribution firms have warned that such revisions could impact consumer prices as well. Decisions on how much fuel to import are based on the EIA data, and any significant inaccuracies could lead to supply chain disruptions.

Nevertheless, gasoline demand has recently tracked as very strong according to GasBuddy, putting the latest weekly demand at 9.28 million bpd, the highest tally of 2024. This suggests that while the discrepancies are a concern, the short-term outlook remains robust.

Market participants will be closely watching the next round of monthly reports from the EIA to see if the conflicting data will persist and what it might imply for the broader U.S. summer oil and gasoline demand. Until then, the market remains in a state of cautious observation, with players relying on a mix of public and private data to gauge the true state of demand.