Karen Matusic, (202) 682-8118
WASHINGTON, July 19, 2006 - Record high crude oil prices led to lower U.S. refined product demand in the first half of 2006 though the nation imported more gasoline than ever before, the American Petroleum Institute reported today in its Monthly Statistical Report for June, which includes supply and demand statistics for the first six months of the year.
“Once again we have seen sharp increases in the price of gasoline and diesel fuel. And, once again, it is due to the fundamental forces of supply and demand – tight world markets for crude oil and high prices, a higher cost of refining and distributing gasoline, a switch to ethanol blends, and sulfur content changes in diesel fuel,” said API Chief Economist John Felmy.
U.S. gasoline demand, as measured by API as deliveries out of the primary distribution system of refineries, bulk terminals and pipelines, declined in the second quarter by 0.4 percent, contrasting with a 0.5 percent increase in the first quarter of the year.
“Our figures show that consumers, facing higher gasoline prices, apparently found ways to drive less and to use fuel more efficiently,” said Ronald J. Planting, manager, statistical information and analysis, for API.
Overall, U.S. refined product demand slumped 1.3 percent in the first six months of 2006 as deliveries for most products were flat to lower than year-ago levels. The exception was for on-highway diesel fuel amid an economic growth-led increase in the volume of goods transported by truck to consumers.
In June, U.S. refiners began producing substantial quantities of Ultra Low Sulfur Diesel (ULSD), a new cleaner-burning fuel mandated by the Environmental Protection Agency. By the end of the month, refiners were producing more than 2 million barrels per day of ULSD.
Gasoline imports soared to a record 1.26 million barrels per day, 18.8 percent above the first half of 2005, as foreign supplies were needed to offset the lingering hurricane impact on domestic refineries, many of which underwent necessary maintenance that had been delayed in the aftermath of last autumn’s storms. Total refined product imports in the first six months of the year were more than 12 percent above year-ago levels to average 3.52 million b/d.
The major hurricanes that slammed the Gulf Coast in late August and September continued to have lingering effects on domestic crude oil production though refineries affected by the storms had resumed normal operations by the end of June. For the first time in a year, refinery inputs, an overall measure of plant activity, rose above 16 million barrels per day in June to stand at 16.3 million barrels per day – the fifth highest monthly average level ever recorded. Gasoline production reached a record of nearly 9.2 million barrels per day in June.
Note: 1 barrel = 42 U.S. gallons