API: US oil demand showed signs of recovery late in 2009

Nick Snow
OGJ Washington Editor

WASHINGTON, DC, Jan. 15 -- US oil demand fell during 2009 but began to recover as the year concluded, the American Petroleum Institute said. Gasoline, kerosene, and all other oils were strongest, but distillate fuel oil lagged, especially for on-highway uses, API’s yearend 2009 and December statistics showed.

“Clearly, petroleum demand is mirroring the economic recovery,” said John C. Felmy, API chief economist, on Jan. 15. “We are seeing December demand figures stronger than fourth-quarter figures and fourth-quarter figures stronger than full-year figures. But the data also indicate that the recovery still has a distance to go, particularly if you look at ultralow-sulfur diesel fuel.”

API’s domestic supply and demand figures for 2009 were similar to the US Energy Information Administration’s global assessment 3 days earlier in its latest short-term energy outlook (OGJ Online, Jan. 13, 2009). It also showed a full-year drop in demand with a recovery gathering momentum as the year wound down.

Total US petroleum product deliveries, which API uses to measure demand, dropped 4% during 2009 to an average 18.7 million b/d from 19.5 million b/d in 2008. Deliveries during December rose 0.6% to an average 19.3 million b/d from December 2008’s average 19.1 million b/d, the report said.

“We’re seeing a firmer economy,” Felmy told reporters during a teleconference. “Individual consumers feel a little more confident, which can lead to improvements in retail sales. That can affect gasoline demand from improved employment. Economic growth can lead to more travel, which can increase jet fuel demand. Resid fuel demand can be affected by industrial, electric utility, and shipping uses. There may not be as tight a link with diesel.”

Distillate declines
In its statistical summary, API said distillate production and inventory levels declined in December as US manufacturing continued to grow for a fifth consecutive month as reported by the Institute of Supply Management. Domestic distillate inventories at the end of December totaled 162.6 million bbl, 3.3% less than the revised figure of 168.2 million bbl on Nov. 30 but 11.4% more than the 146 million bbl level at the end of 2008. Production during December averaged 3.8 million b/d, 0.5% less than a year earlier, while 2009’s full-year average of 3.6 million b/d was 7.9% less than 2008’s 3.9 million b/d.

Inventories of ultralow-sulfur distillate (ULSD), the type used in highway transportation, continued to build to multiyear highs, API continued. Its statistics showed that ULSD stocks finished 2009 at 117.4 million bbl, 1% more than their 116.2 million bbl level on Nov. 30 and 21.6% higher than their yearend 2008 level of 104.7 million bbl.

Refiners responded by reducing ULSD production by 3% year-to-year to an average 3.1 million b/d in December and by 3.2% to an average 3.2 million b/d for all of 2009. Felmy said that the pattern is consistent with what happened earlier when diesel fuel demand began to drop months after the recession began.

Domestic demand for other products began to recover late in 2009, however. Gasoline led the rebound with year-to-year increases of 2.3% in December to an average 9.1 million b/d and 0.3% for the full year to 9 million b/d. Jet kerosene deliveries soared 11% year-to-year during December to an average 1.5 million b/d in contrast a full-year 7.9% drop to 1.4 million b/d, according to API’s statistics.

US oil and condensate production grew during 2009 by 7% to an average 5.3 million b/d from 2008’s 5 million b/d level, API reported. Production during December averaged 5.5 million b/d, 8.6% more than the 5.1 million b/d average a year earlier. “There weren’t hurricane impacts in 2009 as there were in previous years,” said Felmy. “We also have new resources coming on that are very exciting, particularly deep offshore and in North Dakota’s Bakken shale formation. The industry isn’t finished producing oil in this country just yet.”

Contact Nick Snow at nicks@pennwell.com.

Related Articles

EOG sees crude potential in Leonard, Second Bone Spring

12/12/2014 EOG Resources considers various formations within the Delaware basin of West Texas and New Mexico to be one of its three top US plays with the othe...

ETP eyes larger capacity for planned Bakken pipe

12/12/2014 Energy Transfer Partners LP has launched a binding expansion open season to boost capacity on a planned pipeline system that would move oil from th...

Weak crude prices could threaten Bakken production growth

12/12/2014 Bakken shale production set another record in August, but weakening crude prices and flaring reduction efforts threatened to temper production grow...

Bakken producers face possible new vapor pressure standards

12/12/2014 Oil producers in the Bakken, Three Forks, and Sanish plays could face new transportation safety regulations from the North Dakota Industrial Commis...

Bakken flaring plan for Hess includes remote NGL capture

12/12/2014 Hess Corp., taking seriously a state mandate to reduce flaring in the Bakken shale, has adopted the use of a remote NGL capture technology at a han...

US needs more data before ending crude export ban, House panel told

12/11/2014 Much more environmental impact information is needed before the US can reasonably remove crude oil export limits, a witness told a House Energy and...

North Dakota producers face new vapor pressure standards

12/10/2014 North Dakota has approved new rail transportation safety standards for crude oil that stipulate operating standards for oil-conditioning equipment ...

ConocoPhillips slashes 2015 capital budget

12/08/2014 ConocoPhillips has elected to reduce its 2015 capital budget to $13.5 billion, down 20% compared with this year’s budget. The news comes on the hee...

Whiting completes acquisition of Kodiak

12/08/2014 Whiting Petroleum Corp. has completed its acquisition of Kodiak Oil & Gas Corp. following the issuance of a final order by the Supreme Court of...

White Papers

AVEVA NET Accesses and Manages the Digital Asset

Global demand for new process plants, power plants and infrastructure is increasing steadily with the ...
Sponsored by

AVEVA’s Approach for the Digital Asset

To meet the requirements for leaner project execution and more efficient operations while transferring...
Sponsored by

Diversification - the technology aspects

In tough times, businesses seek to diversify into adjacent markets or to apply their skills and resour...
Sponsored by

Engineering & Design for Lean Construction

Modern marketing rhetoric claims that, in order to cut out expensive costs and reduce risks during the...
Sponsored by

Object Lessons - Why control of engineering design at the object level is essential for efficient project execution

Whatever the task, there is usually only one way to do it right and many more to do it wrong. In the c...
Sponsored by

Plant Design for Lean Construction - at your fingertips

One area which can provide improvements to the adoption of Lean principles is the application of mobil...
Sponsored by

How to Keep Your Mud System Vibrator Hose from Getting Hammered to Death

To prevent the vibrating hoses on your oilfield mud circulation systems from failing, you must examine...
Sponsored by

Duty of Care

Good corporate social responsibility means implementing effective workplace health and safety measures...
Sponsored by

Available Webcasts


On Demand

Optimizing your asset management practices to mitigate the effects of a down market

Thu, Dec 11, 2014

The oil and gas market is in constant flux, and as the price of BOE (Barrel of Oil Equivalent) goes down it is increasingly important to optimize your asset management strategy to stay afloat.  Attend this webinar to learn how developing a solid asset management plan can help your company mitigate costs in any market.

register:WEBCAST


Parylene Conformal Coatings for the Oil & Gas Industry

Thu, Nov 20, 2014

In this concise 30-minute webinar, participants have an opportunity to learn more about how Parylene coatings are applied, their features, and the value they add to devices and components.

register:WEBCAST


Utilizing Predictive Analytics to Optimize Productivity in Oil & Gas Operations

Tue, Nov 18, 2014

Join IBM on Tuesday, November 18 @ 1pm CST to explore how Predictive Analytics can help your organization maximize productivity, operational performance & associated processes to drive enterprise wide productivity and profitability.

register:WEBCAST


US HYDROCARBON EXPORTS Part 3 — LNG

Fri, Nov 14, 2014

US LNG Exports, the third in a trilogy of webcasts focusing on the broad topic of US Hydrocarbon Exports.

A discussion of the problems and potential for the export of US-produced liquefied natural gas.

These and other topics will be discussed, with the latest thoughts on U.S. LNG export policy.

register:WEBCAST


Careers at TOTAL

Careers at TOTAL - Videos

More than 600 job openings are now online, watch videos and learn more!

 

Click Here to Watch

Other Oil & Gas Industry Jobs

Search More Job Listings >>
Stay Connected