US Oil Demand Down Sharply So Far This Year

U.S. oil demand for the first 10 months of 2008 fell at rates not seen since the recessions of the early 1980s, the American Petroleum Institute said on Wednesday.

Total U.S. petroleum deliveries—a measure of demand—averaged just 19.6 million barrels per day (bpd) in the January-October period, the lowest level since 2000 and a decline of 5 percent against the same period for 2007.

It was the sharpest demand drop since the early 1980s, API added, saying October petroleum products deliveries were down 4 percent from the previous year.

"Not only have higher prices for much of 2008 been altering consumers' behavior, but more recent economic uncertainties have increasingly been putting a damper on demand, as well," said API statistics manager Ron Planting.

Refinery activity recovered in October from shutdowns due to Gulf Coast hurricanes Gustav and Ike in September with runs at 14.9 million bpd, but lagging behind October 2007 by 2.4 percent.

Gasoline deliveries fell 2.6 percent from January through October and jet fuel fell 4.5 percent.

Demand for distillate fuel oil—including diesel and home heating oil—was down 6.7 percent as residual fuel oil denabd dropped 18.5 percent.

The recovery in offshore production from the hurricanes pushed crude oil inventories up 11 million barrels, or 3.6 percent from September, to 309.5 million barrels in October, up 0.7 percent from the previous year.

Domestic production in the lower 48 states fell 7.2 percent to 4 million bpd, with an average 500,000 bpd still shut by September's storms during October.

But a seasonal increase in Alaska production reduced the decline in total U.S. production to 5 percent from last year.

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