By DAVID BIRD
NEW YORK -- US oil demand dropped to a 16-year low in 2012 and is expected to rise only marginally through 2014, government forecasters said Tuesday.
The Energy Information Administration's update to its monthly Short-Term Energy Outlook shows the world's biggest oil consumer burned less oil than previously thought last year. The EIA said 2012 demand dropped by 1.8% year-on-year to 18.6 million bpd.
The month-earlier forecast showed 2012 demand of 18.65 million bpd. That put demand last year at a 15-year low, but the revision put it to a 16-year low.
With the downward revision for 2012, the EIA now sees 2013 US demand rising 0.3%, to 18.65 million bpd, with 2014 demand up 0.4%, at 18.72 million bpd. The 2014 figure would be down 10%, or nearly 2.1 million bpd below the demand peak hit in 2005, of 20.8 million bpd.
Demand for gasoline -- the most widely used petroleum product in the world's biggest oil consumer -- is expected to flatten out at the 2012 level of 8.72 million bpd through 2014 as the impact of slow growth in the driving-age population, retirement of less-fuel efficient vehicles and improvement in fuel-economy standards take hold.
Demand slipped in 2012 by 0.4%, the third straight decline, hitting an 11-year low.
Jet fuel use is expected to be little changed through 2014, while distillate fuel [diesel/heating oil] and liquefied petroleum gas consumption increase.
Surging US crude oil output is expected to rise more slowly than had been expected. Output in 2013 is expected to rise by 12.6%, a slower rate than the 13.8% rise projected a month earlier. Projected 2013 output of 7.25 million bpd would be the most since 1991.
In 2014, crude oil output is expected to rise 5.1%, to 7.82 million bpd, the most since 1988. Last month, the EIA projected growth of 8.2% to 7.92 million bpd.
"Central to this projected growth will be continuing development of onshore basins," the EIA said. "Drilling in tight oil plays in the Williston, Western Gulf, and Permian Basins is expected to account for the bulk of forecast production growth over the next two years."
Alaskan crude oil output will decline to 500,000 bpd in 2013 and 470,000 bpd in 2014 from 530,000 bpd last year.
Gulf of Mexico output is expected to average 1.4 million bpd this year, up from 1.3 million bpd in 2012. Output in 2014 is expected to average 1.5 million bpd, as some high-volume deepwater projects are expected to come onstream.
Net oil imports are expected to continue to drop, to an average of 6.1 million bpd by 2014 from 7.5 million bpd in 2012. In 2005, net imports peaked at 12.5 million bpd.
The net-import share of US oil demand is expected to drop to 32% in 2014 from a peak of more than 60% in 2005.
Dow Jones Newswires