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Sluggish Economy Pushes U.S. Oil Demand to Lowest Level in Decade

July 15, 2009

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U.S. petroleum deliveries (a measure of demand) plummeted nearly 6 percent for the first half of 2009, to the lowest level for the January-to-June period in more than a decade, as the sluggish economy continued to stifle oil consumption.


Petroleum deliveries fell to 18.75 million barrels per day, down nearly 10 percent from the peak of 20.75 million barrels per day reached in first-half 2005, according to the American Petroleum Institute's Monthly Statistical Report.

"The economic slowdown has had a particularly large impact on diesel and on jet fuel, though gasoline remains depressed, as well," said API Statistics Manager Ron Planting.

First-half jet fuel deliveries fell nearly 13 percent from a year ago as a result of reduced air travel, while distillate fuel oil deliveries dropped 8.6 percent on sluggish demand for freight transportation.

Following two consecutive annual declines in 2007 and 2008, crude oil and product imports dipped by 7.6 percent in 2009's first half due to slumping demand and increased domestic supplies.

For the first half, U.S. crude oil production reached its highest level in four years, at an average 5.29 million barrels per day. Output was up 3.8 percent from a year ago, reflecting new production from the offshore Gulf of Mexico and gains in North Dakota and other onshore areas.

Despite a 12 percent drop in Alaskan production tied to maintenance work on the Trans-Alaskan Pipeline, U.S. crude oil production in June still managed to increase 1.1 percent from May, the sixth straight year-on-year increase for average monthly production.

June's refinery inputs rose to nearly 15 million barrels per day, the highest level since November. The average utilization rate of U.S. refineries rose a more-than-seasonal two percentage points from May, to 84.5 percent for June. That was well above the average for all manufacturing industries, which, according to the Federal Reserve Board, stood at 64.7 percent of capacity for June.

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