Higher Oil Demand Signals Economic Recovery

Jane Van Ryan
Posted December 17, 2010

"Stronger fuel demand tells us a recovery is underway." Those are the words of API's Chief Economist John Felmy today, describing the good news in API's Monthly Statistical Report for November. The report shows that U.S. petroleum deliveries (a measure of demand) climbed 6.5 percent last month over November 2009. The increase was the largest year-to-year increase for any month in 2010.

Deliveries of Ultra-Low Sulfur Diesel (ULSD) fuel--the type that is required for all on-road diesel vehicles, including trucks delivering goods--jumped by 13.2 percent in November. Gasoline deliveries rose 3.2 percent last month as compared to the same time period last year.

"Fuel demand continues to strengthen, a positive sign for our economy," John said. "Gasoline deliveries are up three months in a row and distillate deliveries are up 10 months in row over the same months in 2009."

Domestic crude oil production stood at 5.44 million barrels a day in November, which was slightly higher than in November last year, but 1.3 lower than in October 2010. Crude oil imports were five percent higher than a year ago, averaging 9.1 million barrels a day.

Refineries ran more crude oil through their processing equipment last month. Refinery utilization reached 83.2 percent in November, which was higher than in October 2010 and November 2009. The rate was 15 percentage points higher than the average utilization for all U.S. manufacturing (in October 2010), according to Federal Reserve Board data.