U.S. Fuel Demand Grew With Economy in July, API SaysMark Shenk
U.S. fuel consumption in July reached the highest level for the month in three years, the American Petroleum Institute said.
Total deliveries of petroleum products, a measure of demand, climbed 1.7 percent from a year earlier to 18.9 million barrels a day, the industry-funded group said today. Year-to-date consumption has averaged 18.6 million barrels a day, up 0.6 percent from 2012.
“The uptick in demand is a reflection of the economy,” John Felmy, chief economist with the Washington-based API, said in a telephone interview. “Although overall economy remains weak, we are seeing positive signs of growth.”
Consumption grew from a year earlier in most categories. Demand for gasoline rose 2.2 percent to 9.02 million barrels a day, diesel 8 percent to 3.84 million, ultra-low-sulfur diesel 9.1 percent to 3.66 million and jet fuel 2.3 percent to 1.5 million. Heating oil use declined 27 percent to 139,000.
“Distillate demand has been strong for a while now,” Felmy said. “It’s up because of strength in manufacturing, shipping and exports, sectors that have been doing well.”
U.S. crude-oil production increased 17 percent to 7.5 million barrels a day. It was the highest level of output for any month in more than 22 years, according to Felmy. Crude output rose 17 percent to 6.99 million in the lower 48 states and 23 percent to 511,000 in Alaska.
A combination of horizontal drilling and hydraulic fracturing, or fracking, has unlocked supplies in shale formations in North Dakota, Texas and other states.
North Dakota’s portion of the Bakken formation posted a 1.4 percent increase in production in June, according to the state Industrial Commission. Output rose to a record 756,980 barrels a day, from 746,340 in May. Production in Texas’s Eagle Ford shale formation rose 60 percent to 617,884 barrels a day in May from a year earlier, preliminary data from the Texas Railroad Commission showed.
“All indications are that production will continue to grow in the short term, especially in the Bakken and Eagle Ford basins,” Felmy said. “You are seeing the impact of $100 oil.”
West Texas Intermediate crude for October delivery increased $1.18, or 1.1 percent, to settle at $105.03 a barrel on the New York Mercantile Exchange today. Futures are up 14 percent this year.