U.S. gasoline demand drops despite lower prices

NEW YORK (Reuters) - Retail gasoline demand in the world's largest consuming nation fell 2.5 percent in the week ended December 12 even as prices at the pumps dropped more than a dime, according to a MasterCard SpendingPulse report released Tuesday.

Gasoline demand averaged 9.098 million barrels per day during the week, down 2.5 percent from the previous week and down 5.4 percent from the same week a year ago, according to the weekly report.

The decline in consumption came even as pump prices fell 11 cents to average $1.67 a gallon, according to the report.

U.S. fuel demand has declined in recent months despite falling energy prices as a financial crisis stemming from the soured housing market squeezed consumer spending and confidence.

The U.S. Energy Information Administration forecast that global energy demand will drop for the first time since 1983 this year, and shrink again in 2009 -- led by declines in the United States.

Members of the Organization of Petroleum Exporting Countries were set to meet Wednesday amid widespread expectations they would slash production in an effort to stem a dramatic slide in crude oil prices since summer.

MasterCard Advisors estimates retail gasoline demand based on aggregate sales activity in the MasterCard payments system, coupled with estimates for all other payment forms including cash and checks. MasterCard Advisors is a unit of MasterCard Inc.

(Reporting by Richard Valdmanis; Editing by John Picinich)