Marilyn Radler
Senior Editor-Economics
US crude oil production fell to a 2-year low and showed year-over-year declines for the second month in a row, according to the latest monthly data from the American Petroleum Institute.
At 5.36 million b/d, US crude oil production in June was down by 2% from June 2010. For the second quarter, crude production was down by 0.1% from a year earlier. Natural gas liquids production in this year's first half climbed 4.4% from a year earlier to average 2.066 million b/d.
Preliminary data show that the number of offshore oil wells drilled declined by 82% in the second quarter of this year compared with the 2010 second quarter. Despite the offshore drilling decline, API estimates that onshore oil-well completions, which include wells drilled on private and public lands, were at the highest second-quarter level since 1985.
API also reported that total petroleum deliveries, a measure of demand, rose in June compared with May and with June 2010 and were up 1.9% for this year's first half over the same 2010 period. Gasoline demand was nearly flat compared with June 2010, but up from both April and May of this year.
Ultralow-sulfur diesel demand continued to post strong numbers over 2010, achieving a record high, API said. Total demand for distillate fuel oil in June climbed 7.2% from May and was up 5.4% in the first half compared with a year earlier.
Jet fuel demand in June was up 1.2% from a month earlier, but for the first half demand declined 1.1% from a year earlier.
"The growth in overall demand is consistent with the nation's modest but steady economic expansion," said John Felmy, API chief economist. "Gasoline demand essentially treaded water while demand for ultralow-sulfur diesel continued its year-over-year increase. Gasoline demand appears to still be held back by high unemployment and consumer uncertainty. On the other hand, the robust ultralow-sulfur diesel demand numbers suggest US manufacturing is picking up the pace," Felmy said.
US refinery gasoline production was at a record high for the month and for the year. For the month of June, distillate production was at a 3-year high and jet fuel production was at a 6-year high. Strong refinery production has reduced the need for petroleum product imports, which declined by more than 30% in June from a year ago. Crude imports declined by 4.8%, and total imports fell 10%.
Commercial crude stocks fell by 2.9% from May and by 1.5% from a year earlier but were still at the second-highest stock level for any June since 1990, excluding 2010. With the exception of jet fuel stocks and residual fuel stocks, all key products' stock levels showed declines in June compared with May, API said.
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