US oil, gasoline demand slips to near four-year low

Total US petroleum demand fell 2.7%in July to just above 18 million bpd, the American Petroleum Institute (API) trade group said on Tuesday, representing the lowest July level since 1995 and the lowest level for any month since September 2008.

Total petroleum demand for the year to date was down 2.3%, according to new data from the API.

Gasoline demand fell more, down 2.2% from June and down 3.8% from July a year ago to hit the lowest July level since 1997.

Demand for other major products also declined except distillates, which increased 4.9%, driven by strong ultra-low sulfur diesel deliveries.

“While retail sales for July are up and housing has improved, the weak petroleum demand numbers are a strong indication the economy is still faltering,” said API chief economist John Felmy.

“Unfortunately, achieving robust growth will likely continue to be an uphill climb given the nation’s fiscal challenges, business uncertainty, and a European economy in jeopardy of sliding back into recession.”

Despite weakening demand, refinery production remained strong.

At 9 million bpd, gasoline production reached its third highest July level. Distillate production at nearly 4.8 million bpd was at a record high for any July and the third highest monthly level ever. Year-to-date distillate production also set a record.

Total refinery inputs grew by 2.3% in July to their highest level this year.

Production of all four major products - gasoline, distillate, jet fuel and residual fuels - was greater than demand for those products, the API said. As a result, petroleum imports decreased and exports increased.

Total imports of crude and refined products fell by 9.6% to average 10.4 million bpd in July. Exports of refined products increased to a record high for July, and year-to-date exports were up 14% compared with the same period in 2011.

Refinery utilization rose to 92.7% in July, the second month in a row above 90%, the API said.

Crude oil production remained strong and was up from the prior month, prior year and prior year to date. At 6.225 million bpd, it was the highest level of domestic production for any July since 1998.

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