We can’t credit the polar vortex any more.

During the last unusually cold winter, it was easy to write off heavy US fuel demand as a temporary, weather-driven phenomenon.

But here we are in June, and last week’s weekly petroleum report by the US Energy Information Administration showed a 5.4 percent increase in gasoline products supplied, year-over-year, for the four-week period ending May 23. (Products supplied is the EIA’s proxy measurement of fuel consumption.)

Distillates — a category that includes mostly diesel fuel this time of year — ran even hotter, demand increasing 8.6 percent year-over-year during the same four-week span.

Jet fuel did show a 1.6 percent year-over-year drop, limiting the overall increase in the presumed consumption of refined fuels to 2.2 percent.

The government numbers dovetail with those from the American Petroleum Institute industry group showing a 2.3 percent year-over-year increase in refined products deliveries in April.

That’s quite a blip, given the big and persistent drop in US fuel demand in the wake of the Great Recession.

Or maybe it’s more than a blip, because the trend dates back to last year, and was pronounced enough for the Financial Times to declare that “America returns to gas-guzzling oil demand” as far back in January.

The revival of demand is backed up by bullish industry data points, including increased freight demand, growth in truck registrations and a shortage of truck drivers. The Dow Jones Transportation Average has rallied more than 5 percent to record highs since the end of April, and nearly 30 percent over the last year.

And it’s not just business transportation that’s perked up. Hotel occupancy rates and bookings are up strongly in what’s shaping up as the best travel season since 2007, and possibly since 2000. The staycation era is mercifully receding in the rearview mirror.

But perhaps the best proof of increased demand can be found in the fuel market supply dynamics.  US gasoline production was up 9 percent year-over-year to hit a record high in April, according to the API, while distillate output jumped 12 percent for its best April ever.

Yet gasoline prices have rallied over the last six months.

Exports continue to aid the refining boom, rising 16 percent year-over-year and accounting for nearly 20 percent of the domestic fuel production, according to the API.

If improvement in US demand persists alongside the rising export tide, refiners already operating near maximum capacity could see a nice bump in margins.

The leading US Gulf Coast refiners have been big winners in The Energy Strategist portfolios, with Marathon Petroleum (NYSE: MPC) up 27 percent since our Oct. 24 upgrade to a Buy, and Valero Energy (NYSE: VLO) returning 43 percent since the Buy recommendation on the same day.

But other refining stocks we like have continued to lag, and could get a boost this summer if refinery turnarounds drive down the price of crude while the domestic shale supply keeps growing.

Ultimately, a permanent return to growth in US fuel consumption would serve as a big prop to oil prices, since the US still accounts for 20 percent of global crude demand.

But that outcome remains far from assured given continuing gains in fuel economy.

Portfolio Updates

Rice Drills a Monster

The second time could prove to be the charm for Aggressive Portfolio outperformer Rice Energy (NYSE: RICE), which broke out to a record high Monday after announcing that its new Utica well had set an initial production record for that play, only to finish lower on the day as the early gains evaporated.

On Tuesday Rice was back into record highs, and deservedly so. Its Bigfoot 9H well in southeastern Ohio’s Belmont County delivered an initial daily production rate of 41.7 million cubic feet of gas per day (mmcf/d), topping the previous record of 38.9 mmcf/d posted by Growth Portfolio holding Antero Resources (NYSE: AR) in neighboring Monroe County to the south. By way of comparison, Cabot Oil & Gas (NYSE: COG) was averaging some 20 mmcf/d in initial production on wells drilled in the dry-gas sweet spot of the Marcellus Shale 18 months ago.

The monster Rice well named after a monster truck has a horizontal length of nearly 7,000 feet and employed 40 frack stages.

It’s not clear yet whether the impressive recent well results from the southern sweet spot of the Utica will prove relevant to other portfolio recommendations with Utica positions, including in addition to Antero Carrizo Oil & Gas (Nasdaq: CRZO) to the west of Rice’s turf, Gastar Exploration (NYSE: GST) to the east and Chesapeake Energy (NYSE: CHK) to the north.

But they’re certainly highly relevant to Rice, which has bet everything on the Marcellus and the Utica and plans to drill seven more Utica wells this year in addition to 37 Marcellus ones in Pennsylvania as it rapidly ramps up output.

Rice has returned since 37 percent since our Feb. 13 recommendation and is very near the buy maximum we increased less than three weeks ago in response to strong quarterly results. Buy RICE while you still can below $33.  

Penn Virginia Still Our Type

In contrast with Rice, we’ve had lousy early luck with last week’s recommendation of Penn Virginia (NYSE: PVA), which dropped a cumulative 14 percent Friday and Monday before rebounding Tuesday, on worries that a third-party type curve included by the company in its latest presentation assumed a faster decline rate for its Eagle Ford wells than the company’s internal estimates, resulting in a 29 percent downgrade of estimated ultimate recovery vs internal projections. Along with many well-informed observers on Wall Street and elsewhere we think the concerns are overblown, and that Penn Virginia’s sale of gas-producing acreage in the Mississippi, announced Monday, is the more important tell as the company concentrates nearly all of its capital spending on the high-return oil wells in the Eagle Ford. Buy PVA below $20.