Nov. 19 (Bloomberg) -- U.S. fuel demand fell 5.2 percent in the first 10 months of this year, the biggest drop since 1981, the American Petroleum Institute said.

Deliveries of petroleum products, a measure of consumption, averaged 19.6 million barrels a day in the period, down from 20.7 million barrels a day a year earlier, according to a report from the industry-funded API.

“Not only have higher prices for much of 2008 been altering consumers’ behavior, but more recent economic uncertainties have increasingly been putting a damper on demand,” said Ron Planting, an analyst with the Washington-based institute, who helped prepare the report.

Demand dropped 5.4 percent during the first 10 months of 1981, Planting said. The U.S. economy contracted that year.

Gasoline demand averaged 9.06 million barrels a day from January through October, down 2.6 percent from a year earlier, the report showed.

Deliveries of distillate fuel, a category that includes heating oil and diesel, averaged 3.93 million barrels a day during the period, down 6.7 percent. Jet-fuel consumption averaged 1.55 million barrels a day, a 4.5 percent decline.

Implied demand for residual fuel averaged 591,000 barrels a day during the 10-month period, down 19 percent from a year earlier, according to the report. Some manufacturers and utilities switch between residual fuel and natural gas, depending on cost.

The U.S. produced 4.9 million barrels a day of crude oil through October, down 2.6 percent from a year earlier, according to the institute. Production for the period was down 49 percent from the peak of 9.6 million barrels a day in 1970.

To contact the reporter on this story: Mark Shenk in New York at mshenk1@bloomberg.net.

Last Updated: November 19, 2008 10:00 EST