API: US oil demand fell in June, first half

US oil demand in June declined by 3% from a year earlier, according to the latest monthly statistical report from the American Petroleum Institute. During this year’s first 6 months, demand fell by 2.6%.

“A weakening economy requires less fuel, and this by most measures is a weakening economy,” said API chief economist John Felmy. “The fall in demand in June is particularly notable and consistent with other disappointing metrics in the economy, including falling retail sales and contraction in the manufacturing sector,” he said.

Gasoline demand in June declined by 2.5% from a year earlier and fell by 1% in this year’s first half. Demand for distillates, jet fuel, and residual fuel oil also declined in this year’s first half, while distillate and residual fuel oil demand also declined in June. Only demand for jet fuel increased in June, up by 0.7% from a year earlier.

Weak demand bolstered US exports of refined products by 17.8% last month, as refinery utilization averaged 91%, up 5.1 percentage points from May. This marked the first month since July 2011 that refinery utilization exceeded 90%, API reported. US imports of crude and refined products fell in June by 6% to average 10.9 million b/d.

US crude oil production in June increased by 10.7% from June 2011 to average 6.197 million b/d—the highest June output level since June 1998, according to API. Alaskan production in June was down by 9.5% from a month earlier and down by 6.5% from a year earlier to 517,000 b/d. Production of natural gas liquids in the US climbed by 9.4% from a year earlier in June, averaging 2.38 million b/d.

US inventories of crude oil at the end of June were 382.4 million bbl, up 6.7% from a year earlier and down 0.4% from the end of May. June gasoline stocks were down 4% from a year earlier but up 0.6% from a month earlier.