US petroleum demand drops 5.7% in January on heating oil decline

18 February 2012

Total petroleum deliveries (a measure of demand) fell 5.7% in January 2012 compared with January 2011 to just over 18 million barrels per day, according to figures from the American Petroleum Institute (API). Gasoline deliveries slipped 0.2% to 8.4 billion barrels per day. While demand for all major refined products declined, the overall dip was driven in significant part by a nearly 27% reduction in deliveries of high-sulfur distillate fuel, which is used in home heating. The slide in heating fuel demand reflects January’s relatively warm temperatures.

Consumer demand for gasoline has not recovered from 2007 highs. A number of factors arguably have contributed to this in recent years, including more fuel-efficient cars, higher gasoline prices and demographic changes in the driving-age population—in addition to a sluggish economy.

—API chief economist John Felmy

Supplies for refined products remained ample, with gasoline production of 8.9 million barrels per day setting a record high for January. With the exception of residual fuels, production of all other major refined products also increased for the month, and, like gasoline, distillate fuel production set a record.

Total refinery inputs were higher than last year’s levels by 1.9%. Imports of crude oil and refined products fell in January by 14% to average 10.1 million barrels per day, with products hitting a 17-year low for the month. Total petroleum exports (almost all of which were product exports) fell from the recent highs of 2011 to average just over three million barrels per day, yet were still higher than January 2011 levels by 13.5%.

Crude oil production rose 3.8% in January to average 5.7 million barrels per day, an eight-year high for the month. Alaskan production was up by 34%, and North Dakota production was also strong. The number of oil and gas rigs remained flat from December 2011 levels, according to the latest reports from Baker-Hughes Inc.

Crude oil stocks were down 3.2% from January 2011 but up slightly from December 2011. Gasoline stocks were up from month-ago and year-ago levels and at a three-year high for January. Distillate fuel inventories were down from month-ago and year-ago levels.