US sees lower 2011 oil use, becomes net exporter


US oil demand in all of 2011 dropped 1.8%, or by 345,000 bpd, from 2010 to a two-year low of 18.835 million bpd, government data released Wednesday show.

Demand dropped for the fifth of the past six years, and followed a 2.2% drop a year ago, data from the Energy Information Administration show.

Demand for gasoline, the most widely used petroleum product in the world's biggest oil-consuming nation, fell 2.9%, to a 10-year low of 8.736 million bpd.

The drop came as the nationwide average retail price of regular gasoline for all of 2011 set a record at $3.521/gal, up 26.6% from the prior year, EIA data show. 

US oil output climbed 7.4% to 5.877 million bpd, the highest level since 1999.

Production rose for a third straight year, which is the longest string of annual increases since the early 1980s.

Demand for distillate fuel - diesel fuel and heating oil - rose 1.3%, to a three-year high of 3.849 million bpd.

Within the distillate figure, demand for ultra-low-sulfur diesel fuel, used to power trucks and trains, jumped 7.2% to 3.443 million bpd.

That was the highest annual demand for the cleaner-burning fuel since its introduction in 2004.

The rise in diesel-fuel demand came even as diesel prices averaged a record high $3.84/gal in 2011, up 28.3% from 2010.

Jet fuel use in 2011 fell 0.5% from a year earlier to a two-year low of 1.425 million bpd.

Use of heavy residual fuel oil continued its decline, dropping 10.3%, to 480,000 bpd in 2011, the lowest level on records back to 1936. The fuel is losing market share to cleaner-burning natural gas in the power-generating market.

For December, total US oil demand fell 5%, or 984,000 bpd, from a year ago to 18.738 million bpd. That was up by a fractional 4,000 bpd from November, but was a 15-year low for the month.

Gasoline use in December dropped 2.8% from a year ago, to 8.659 million bpd, a 10-year low for the month, but up 1.5% from November.

Distillate use was down 9.4% from a year ago in December, at 3.782 million bpd, also a 10-year low for the month. Demand was down 6.7% from November.

Within the distillate figure, demand for ultra-low sulfur diesel fell 1.6% in December from a year ago, to 3.332 million bpd.

December jet fuel use was off 2.1% from a year ago, at 1.354 million bpd, while residual fuel use was off 1.1% from a year ago, at 519,000 bpd.

Amid slumping demand for gasoline, the US chalked up record net exports of the fuel in December and for all of 2011, EIA data show. 

Latest EIA data show US gasoline output of 9.118 million bpd in December topped demand of 8.659 million bpd by 459,000 bpd.

For all of 2011, gasoline output of 9.034 million bpd averaged about 300,000 bpd, or 3.4%, higher than gasoline demand.

Net exports of gasoline set a record for any month in December, at 556,000 bpd, according to EIA data beginning in 1945.

For all of 2011, net exports of gasoline averaged a record 373,667 bpd, according to EIA annual records back to 1935.

Much of the increased exports are going to Mexico and countries in Latin and South America.

Net exports of distillate fuel set a record for any month at 954,000 bpd in December, more than twice the year-ago level.

Net distillate exports set an annual average record of 677,000 bpd, up 58% from a year ago.

US refiners processed 14.841 million bbl of crude in December, down 135,000 bpd from a year ago.

Full-year crude runs averaged 14.826 million bpd, the most since 2007. Refiners paid a record-high average of $102.14/bbl in 2011, one-third higher than a year ago.

Distillate fuel accounted for 31.2% of refinery yield in December, a record high for any month, EIA data show.

The gasoline yield in December dropped to a three-year low of 45.6%, from 46.4% a year earlier.

Dow Jones Newswires

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