Total US petroleum deliveries (a measure of demand) fell 2.7% in July to just above 18 million bpd. This is the lowest July level recorded since 1995 and the lowest level for any month since September 2008. Total petroleum demand for the year to date was down 2.3%.
Gasoline demand fell more, down 2.2% from June and down 3.8% from July a year ago to the lowest July level since 1997. Demand for other major products also declined except distillates, which increased 4.9%, driven by strong ultra low sulfur diesel deliveries.
Reacting to the news, API chief economist John Felmy commented: ‘While retail sales for July are up and housing has improved, the weak petroleum demand numbers are a strong indication the economy is still faltering. Unfortunately, achieving robust growth will likely continue to be an uphill climb given the nation’s fiscal challenges, business uncertainty, and a European economy in jeopardy of sliding back into recession.’
Despite weakening petroleum demand, refinery production remained strong. At 9 million bpd, gasoline production reached its third highest July level. Distillate production at nearly 4.8 million bpd was at a record high for any July and the third highest monthly level ever. Year-to-date distillate production also set a record. Total refinery inputs grew by 2.3% in July to the highest level this year.
Production of all four major products – gasoline, distillate, jet fuel and residual fuels – was greater than demand for those products. As a result, petroleum imports decreased and exports increased. Total imports of crude and refined products fell by 9.6% to average 10.4 million bpd in July. Exports of refined products increased to a record high for July, and year-to-date exports were up 14% compared with the same period in 2011.
Refinery utilisation rose to 92.7% in July, the second month in a row above 90.0%.
Crude oil production remained strong and was up from the prior month, prior year and prior year to date. At 6.225 million bpd, it was the highest level of domestic production for any July since 1998.
The number of oil and gas rigs decreased from 1972 in June to 1944 in July, according to the latest reports from Baker-Hughes, Inc., and has stayed under 2000 for all of 2012.
Crude oil stocks were up 5.1% from last year, but down 4.3% from June levels to end in July at 365.8 million bbls. Stocks of all major products were down from last year’s levels. Gasoline and distillate stocks were both up in July compared with the month before.
Adapted from press release by Joe Hester.