API: U.S. IMPORTED RECORD VOLUME OF PETROLEUM IN 1994

U.S. Oil Supply and Consumption Pattern (17088 bytes)

The American Petroleum Institute reports that last year, for the first time in history, more than half the oil used in the U.S. was imported.

The mark is based on an average daily volume for the year.

The total volume of imported oil also set a record.

API said the U.S. imported 8.894 million b/d of crude oil and petroleum products last year, or 50.4% of domestic demand. The previous high was 49.9% in 1993.

For total imports, the old mark was 8.786 million b/d set in 1977. But API noted that U.S. petroleum demand was nearly 800,000 b/d lower in 1994 than in 1977.

"It has been the decline in domestic crude production - down more than 1.5 million b/d since 1977 - that has led to higher imports," API said. "In fact, domestic crude oil production in 1994 averaged 6.629 million b/d, the lowest level in 40 years."

PRODUCTS DEMAND

Total domestic products supplied, a key measure of demand, was up 2.4% last year at a 17.653 million b/d average.

Gasoline demand was up 1.7% at an average 7.605 million b/d in 1994. Gasoline supplied in December 1994 topped the 8 million b/d mark and was 4.7% higher than demand in the same month a year previously. This was the result of supplying marketers with reformulated gasoline to meet the Jan. 1 deadline for sales at the pump.

Kerosine jet fuel demand increased 9.4% last year, while demand for distillate fuel (home heating oil and diesel fuel) rose 4.6%. Residual (heavy) fuel oil demand continued to decline in 1994, slipping 8.9%.

U.S. refineries operated at 92.7% of capacity last year, up a little from 91.5% in 1993. Total inventories of crude oil and petroleum products were 1,063,800,000 bbl at yearend 1994, the highest yearend volume in 7 years and more than 30 million bbl above the recent year average.

Ed Murphy, API director of finance, accounting, and statistics, said U.S. oil consumption grew at the same rate as total energy use. Oil's share of total energy consumption remained at the same level, about 40%, of the last 5 years. But the share of natural gas grew to 25%.

The 1.7% growth in gasoline consumption was close to what it has been during the past decade.

Murphy said refiners have made a smooth transition to reformulated gasoline in some parts of the country, "a tribute to the efforts of this industry to manage the largest change in gasoline ever made in this country in a way that imposes little inconvenience on consumers."

Murphy called it "obvious" that the composition of petroleum consumption has been changing. Uses such as heating and electrical power generation, where a number of substitutes are available, have lost market share, while other uses with fewer substitutes, particularly petrochemical consumption, are growing fairly rapidly.

OIL PRODUCTION

Murphy said investments in Alaskan North Slope production facilities earlier in the 1990s slowed the rate of decline in Alaskan production from 8% in 1993 to only 2% last year. But production from the Lower 48 states fell by 3.7%, a rate slightly higher than the previous year. The result was that U.S. production of crude oil fell by 3.2% in 1994 to slightly more than 6.6 million b/d, its lowest level since 1954.

There is no evidence of a near term turnaround. Murphy noted that total well completions fell 24% last year, and oil well completions plunged 30%.

API said 18,997 oil wells, gas wells, and dry holes were completed last year, vs. 25,051 in 1993. Of the 1994 total, 5,856 were oil wells (down 31.3%), 8,079 were gas wells (down 17.7%), and 5,062 were dry holes (down 24.6%).

Total footage drilled was 111.625 million ft, down 19% from 137.776 million ft in 1993.

Exploratory oil well completions were up 2.8% and exploratory gas well completions were up 14.3%. But a 15.2% drop in exploratory dry holes resulted in an overall decline of 8.7% in total exploratory wells.

Development oil well completions fell 33.3%, gas well completions 19.3%, and dry hole completions 30.3%. Total overall completions fell 26.6% and development well footage was down 21.3%.