Wednesday, August 23, 2006

Gas Demand Grows In July Despite $3/Gallon Average

Aug 21: U.S. gasoline demand rose in July compared to year-earlier levels despite higher pump prices, data compiled by the American Petroleum Institute (API) shows. In its Monthly Statistical Report covering July 2006, API noted that gasoline deliveries, a proxy for demand, climbed 1.7 percent. U.S. distillate fuel use also climbed, up 9.2 percent compared to July 2005, but lower deliveries of jet fuel, residual fuel oil and other products offset the gains to push total U.S. petroleum deliveries down 0.2 percent versus July 2005 levels. API said the gasoline demand increase was a bit "puzzling," given the potential dampening effect of higher retail prices averaging nearly $3 per gallon for the month -- up 30 percent from one year earlier and 56 percent from July 2004. API said, “Stronger income growth may have provided a boost to demand, but we still believe consumers are adjusting their travel patterns as a result of higher prices."

On the supply side, U.S. crude oil production slid 1.3 percent July compared with a year earlier, the smallest year-on-year decline in 14 months. Domestic refinery operations continued at a strong pace as the national capacity utilization rate averaged 92.6 percent in July, down from 94 percent in July 2005. U.S. petroleum imports rose to 14 million barrels per day, a record for the month of July and the fifth highest level ever.

Access a release from API (click here). [*Energy]