US Oil Demand Lowest in Decade
The numbers coming out of The American Petroleum Institute are grim indeed.
U.S. petroleum deliveries (a measure of demand) plummeted nearly six percent for the first half of 2009, to the lowest level for the January-to-June period in more than a decade, as the sluggish economy continued to stifle oil consumption.
A decade of growth wiped away just like that. Not all products were impacted equally though, with Jet Fuel hit worst and gasoline least.
First-half jet fuel deliveries fell nearly 13 percent from a year ago as a result of reduced air travel, while distillate fuel oil deliveries dropped 8.6 percent on sluggish demand for freight transportation. Residual fuel oil deliveries fell by 9.1 percent, reflecting both fuel substitutions and the economic slowdown. First-half gasoline deliveries slipped less than 1 percent from already-depressed levels of a year ago, reaching their lowest level for the period since 2003.
Recovering from these level will take some time, and a massive turnaround in the economy. Meanwhile, new vehicles are always more efficient than the old ones they replace so it takes more vehicles to use the same volume of fuel.
On the demand side, the industry is in for a long drawn out time of problems.
