Jane Van Ryan
Posted October 15, 2010
API Chief Economist John Felmy told reporters this morning that there is glimmer of hope that the economy might be improving. API's Monthly Statistical Report for September shows that U.S. demand for oil products grew last month, foreshadowing a shift from economic stagnation to recovery.
In September, deliveries (a key indicator of demand) of distillate products surged 6.9 percent over the same time period last year, driven in part by a 9.4 percent increase in demand for Ultra-Low Sulfur Diesel (ULSD) fuel. ULSD fuel is used by long-haul trucks to deliver goods and services across the country and is used by economists as a measure of the nation's economic activity.
"The September data suggest a move toward economic recovery," John said. "Stronger distillate demand indicates an uptick in industrial activity." But he said it's too early to celebrate because September's demand figures are down considerably from the record demand levels recorded in 2007 before the recession.
John added that stronger jet fuel and gasoline demand pointed to increased business and consumer confidence last month. Jet fuel demand climbed 11.6 percent in September, and gasoline demand rose 0.1 percent over the same month a year ago. But John also cautioned that it's too early to celebrate because September's demand figures are down considerably from the record demand levels recorded in 2007 before the recession.
Further, crude oil prices have been about $20 higher per barrel on average in 2010 over 2009, a fact that has been reflected in gasoline and diesel prices at the pump. John explained that diesel fuel and gasoline prices have risen about 48 cents per gallon, which is in line with the rise in crude oil prices. As API research has shown, gasoline and diesel prices have tended to track oil prices.
At the end of September, U.S. crude oil supplies stood at 363.1 million barrels, which was more than 8 percent higher than at the same time last year. Refinery outputs were slightly lower than in September 2009, but gasoline production reached 9 million barrels per day, the highest level on record for any September.
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