WASHINGTON (Reuters) - U.S. crude oil and petroleum product demand soared 4.4 percent in February from a year earlier, reaching the highest for that month in three years as an improving economy boosted fuel consumption, the American Petroleum Institute said on Friday.
February’s petroleum deliveries, excluding exports, averaged 19.691 million barrels per day, up 831,000 bpd from a year earlier, the API’s monthly supply and demand report showed.
Deliveries, a good indicator of demand, are calculated by the API to reflect petroleum products moved from refineries and bulk storage to wholesale and retail suppliers.
“The boost in deliveries reflects an economy gaining strength,” API chief economist John Felmy said. “The Federal Reserve survey indicates an expansion in business and manufacturing. So it’s no surprise we’re seeing growth in petroleum deliveries.”
The growing economy allowed petroleum demand to overcome the negative effects on fuel consumption of rising oil and gasoline prices, according to Felmy. “At this point it looks like the economic impacts are outweighing the prices so far,” he said.
It is hard for consumers to change their driving habits in the short term when gasoline prices rise, Felmy said.
He said it was unclear whether the much higher fuel prices this month would be reflected in lower demand when the API issues its report for March consumption. Japan’s earthquake is likely to result in more fuel imports into that country, some of which could come from U.S. refineries this month.
The API’s demand figure for February almost matches the U.S. Energy Information Administration’s preliminary estimate of 19.631 million bpd for the month. The EIA issues its revised demand number at the end of April.
U.S. gasoline demand in February jumped 4.2 percent to 9.014 million bpd, a record high for the month, the API said. Gasoline production also was the highest ever for the month, rising 7.8 percent to 9.241 million bpd.
Demand for distillates, which include heating oil and diesel fuel, increased 3.8 percent to 4.015 million bpd.
Jet fuel demand in February grew by 7.1 percent to 1.437 million bpd, the highest for the month in three years, while residual fuel use rose 26.6 percent to 650,000 bpd.
On the supply side, U.S. crude oil production declined 1.6 percent to 5.428 million bpd.
Crude oil and petroleum product imports averaged 10.565 million bpd in February, down 5.2 percent from a year earlier.
Total imports in February accounted for 53.6 percent of U.S. oil demand, down from 59.1 percent a year earlier.