U.S. demand for oil slumped by more than three percent during the first three months of the year to the lowest level for the first quarter period in more than a decade, API data shows, reflecting a drop in economic activity because of the recession.
U.S. demand for distillate fuel oil (measured as deliveries), including diesel and heating oil, fell by 8.5 percent from the same quarter a year ago while jet fuel demand dropped by 7.6 percent, according to API’s Monthly Statistical Report. At a time of relatively low pump prices, gasoline demand mustered a modest year-on-year increase of 0.8 percent.
“The recession’s impact on demand has been most evident in the business sector, ranging from weaker highway and rail freight demand to cuts in air travel,” said API Statistics Manager Ron Planting.
Despite the demand slump, U.S. gasoline production rose 1.5 percent from first-quarter 2008 while distillate output was up more than 4 percent to a first-quarter record of 4.17 million barrels per day. Refinery production of both jet fuel and residual fuel oil dropped from a year ago.
U.S. crude oil production averaged 5.3 million barrels per day for the first quarter, up nearly five percent from a year ago. In March alone, U.S. crude oil production neared 5.5 million barrels a day.
With weak demand and an increase in domestic production, first quarter imports fell to 12.8 million barrels a day, down 0.3 percent from a year ago and the lowest for the first quarter in five years, largely reflecting a 1.5 percent drop in crude oil imports. Refined products imports rose 3.6 percent over first quarter year-ago levels.
Crude oil inventories ended March at 363 million barrels, the highest since August 1990, while distillate also ended the month above year-ago levels and gasoline inventories were the second highest for March in five years.