U.S. oil demand rises in January

U.S. oil demand rose in January compared to year-earlier levels as falling pump prices and relatively clear driving conditions boosted gasoline use. Demand for jet fuel and distillate fuel oil also posted year-on-year increases, data compiled by the API show.

In its Monthly Statistical Report covering January 2007, API also noted that U.S. gasoline production reached an all-time high for January, the ninth straight same-month record. Domestic distillate output also hit a record high for the month of January. Overall U.S. refinery activity, as measured by refinery throughput, was up nearly one percent from a year-ago, but at 87.8 percent capacity, it was down nearly 3 percent from December because of scheduled maintenance work at some of the plants.

Petroleum deliveries, a proxy for demand, were up 2.8 percent in January versus January 2006 levels. A 3.4 percent year-on-year increase gasoline deliveries combined with an 8 percent boost to distillate demand and a rise of more than 7 percent in jet fuel demand offset a dramatic 27 percent decline in residual fuel oil demand in the month.

“The increase for gasoline was larger than we’ve seen in a while, but January tends to be a volatile month for demand because of the vagaries of weather, said Ron Planting, API’s manager of statistical information and analysis.

U.S. crude oil production averaged nearly 5.3 million barrels per day, up from January 2006 levels but slightly below the 17-month high achieved in December. At nearly 4.5 million barrels per day, production in the lower 48 states was up 5.9 percent from January 2006’s hurricane-impacted levels. Alaskan production averaged 775,000 barrels per day, down 6.6 percent from January 2006. Alaskan production hampered by a five-day reduction of throughput in the trans-Alaskan pipeline after shipping delays resulted in high inventory levels.

Overall petroleum imports reached their lowest levels in 28 months, down six percent from last January, when imports had reached an all-time January high. The largest decline was in refined product imports, which fell more than 19 percent from their strongest January ever in 2006. Crude imports were at a 16-month low of 9.6 million barrels per day.