June 7, 2016 [OPIS] - Diesel demand surged in the U.K. in the first quarter of the year, extending a long-term trend that accelerated last year amid low prices, data from the government showed this month.
Nearly 5.9 million metric tons was delivered to forecourt stations over the first three months of 2016, up 314,000 tons or 5.6% from a year earlier.
This was a record volume for the first three months of a year, typically the weakest quarter for diesel demand.
Diesel demand has been steadily growing for more than 20 years, reaching 23.65 million tons in the U.K. last year compared to just over 15 million tons in 1998.
But the growth in volume also sped up last year, with motorists using an extra 1 million tons of the road fuel compared to 2014.
Year-on-year growth was 750,000 tons in 2014 and 388,000 tons in 2013, according to data from the Department of Energy and Climate Change.
Wholesale European diesel prices slumped to multi-year lows in the first quarter amid the tumble of crude prices which saw front-month Brent prices hit a low of just over $27/bbl in mid-January.
Diesel barge prices in Amsterdam, Rotterdam and Rotterdam averaged around $312/ metric ton in the first quarter of this year, compared to $530 for the same three months of 2015, $924.50 in 2014, and $973.50 in 2013, according to OPIS data.
Diesel prices have also been lower than gasoline, which has been buoyed globally by sharply rising demand in Asia.
First-quarter demand for other oil products in the U.K. was little changed with the exception of naphtha, which gained 64% year on year amid strong demand from petrochemical companies, and liquid petroleum gas, which hit a record high, the U.K government data showed.
U.K naphtha demand reached 355,000 tons in the first three months of this year, the highest first quarter since 2007 and up 139,000 tons from a year earlier.
Butane and propane demand hit 1,022 million tons in the first quarter, surpassing the previous quarterly record of 1.013 million tons in the first three months of 2008.
U.K gasoline demand was little changed year on year at 2.87 million tons, while jet fuel demand rose to 2.6 million tons, around 60 tons more than the first three months of 2015.