While gasoline deliveries are down, last month's total petroleum demand rose 3.8 percent over the numbers reported in July 2009. Surprisingly, the deliveries of low sulfur distillates, a product commonly used to make diesel fuel, shot up 11.6 percent. While we'd like to believe that more Americans are fueling up with diesel fuel, API chief economist, John Felmy, says otherwise:
Apparently, the additional diesel fuel is required by trucking industry as it moves back into action following a slight rebound in the overall economy. Maybe, though, a small portion of the increased demand can be chalked up to the rising popularity of clean diesel vehicles. Follow the jump for more statistics from the API.In contrast, the increase in distillate fuel demand from last July continues the stronger distillate demand numbers observed over the first half of 2010, following 29 straight months of decline beginning in October 2007. This suggests some growth in industrial and commercial activity. But a recovery it certainly does not prove.
[Source: American Petroleum Institute | Image: Nevada Tumbleweed – C.C. License 2.0]
API: Weak gasoline demand reflects struggling economy
WASHINGTON, August 20, 2010 – At 9.3 million barrels a day, U.S. gasoline deliveries (a measure of demand) fell slightly (0.03 percent) last month compared with July 2009, continuing weak deliveries for the first half of the year and mirroring the faltering U.S. economy. Except for 2008, it was the lowest July gasoline demand number since 2003.
Total petroleum demand, on the other hand, rose 3.8 percent in July over a year ago. This includes a strong 11.6 percent increase for deliveries of low sulfur distillates, which are primarily diesel fuels used in trucking, and a 6.9 percent increase in kerosine jet fuel deliveries.
"With unemployment high and July regular gasoline prices more than 20 cents a gallon above those a year ago, consumers likely have been shopping and vacationing less and trimmed their gasoline purchases accordingly," said API Chief Economist John Felmy. "In contrast, the increase in distillate fuel demand from last July continues the stronger distillate demand numbers observed over the first half of 2010, following 29 straight months of decline beginning in October 2007. This suggests some growth in industrial and commercial activity. But," he emphasized, "a recovery it certainly does not prove. We need to be cautious about implementing policies, including increasing taxes on the petroleum industry, that could squelch nascent growth and keep more Americans unemployed."
Domestic crude oil production rose marginally in July over June 2010 to 5.4 million barrels per day. That was down 0.4 percent from July 2009 but still higher than any other July since 2004. U.S. drilling activity increased over June, according to Baker Hughes Inc.
U.S. refineries produced 9.4 million barrels of gasoline a day in July, up from June and from a year before, which helped raise refinery utilization rates to 87.4 percent, marking the third consecutive monthly increase. Total product imports for July at 2.1 million barrels a day were down, but gasoline imports including blending components were up 4.1 percent from the previous July. Crude oil imports rose by 5.6 percent from July a year ago to 9.6 million barrels per day. Crude oil and gasoline stocks continued to build from June levels and also were up from July a year ago. Distillate stocks were up from June but down from July a year ago.
API represents more than 400 oil and natural gas companies, leaders of a technology-driven industry that supplies most of America's energy, supports more than 9.2 million U.S. jobs, accounts for 7.5 percent of the U.S. economy, and, since 2000, has invested nearly $2 trillion in U.S. capital projects to advance all forms of energy, including alternatives, and reduce the industry's environmental footprint.