Bob McCarty Writes

The pace of U.S. petroleum delivery declines continued to slow last month, according to the American Petroleum Institute’s Monthly Statistical Report, which noted the 2.1 percent year-to-year slip in overall petroleum deliveries (a measure of demand) was the smallest in a year and a half.

While distillate fuel oil (diesel and heating oil), along with jet fuel, continued to show year-to-year delivery declines, of 3.3 percent and 11.1 percent, respectively, August gasoline deliveries rose, marking the third consecutive monthly increase. Prior to the past three months, gasoline delivery declines had persisted for more than a year and a half. Still, gasoline deliveries for the traditional June-through-August peak driving season, while up one percent from a year ago, were measurably below the peak reached in 2007, and with the exception of 2008, were the lowest since 2002.

“While lessening economic gloom is likely one factor behind the slight rebound in petroleum demand, lower retail prices may have also played a role, particularly for gasoline,” noted API Statistics Manager Ron Planting. “We saw retail gasoline prices some 35 percent lower than a year ago during the peak driving season when there is more discretionary driving.”

U.S. crude oil production jumped 6.2 percent in August, compared with a year ago. While some of the increase reflected the continued benefits of investment in new technologies in recent years, a lack this year of Gulf of Mexico tropical storm activity and less downtime in Alaska production operations also played a role. In August 2008, safety precautions ahead of Gulf of Mexico hurricanes, as well as downtime for Alaska operations, temporarily lowered production.

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Crude oil imports, which totaled 9.5 million barrels per day in August, rose from July levels, but remained 8.2 percent lower than a year ago. Combined with the 15 percent drop in production imports compared with last year, the overall decline in total U.S. petroleum imports averaged nearly 1.3 million barrels per day in August, or almost 10 percent compared with the corresponding month a year ago.