Oil demand slumps with economy, API says

Nov. 19, 2012 at 8:42 AM
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WASHINGTON, Nov. 19 (UPI) -- Petroleum deliveries in the United States declined last month but production levels increased, an energy trade group said.

John Felmy, chief economist at the American Petroleum Institute, said slumping demand for petroleum products in the United States reflected a weak economy.

"The simple fact is that unemployment remains high and economic growth has been extremely modest," he said in a statement. "Petroleum demand is reflecting that."

API said October petroleum deliveries, a reflection of demand, was down 2.3 percent compared to the same time last year. This demand benchmark for October 2012 was down to its lowest level since 1995, the trade group said.

The employment outlook for the United States remains modest, with unemployment rates just less than 8 percent. Recent industrial production figures were hurt in part by the devastation brought on by Hurricane Sandy, a late October storm that battered the East Coast.

"For many months, we've seen variations on the same theme -- weak demand versus a year ago and some of the weaker demand numbers over the past decade," Felmy said.

Crude oil production was up more than 13 percent compared to October 2011, the trade group said. In North Dakota, home to the giant Bakken formation, crude oil production was 50 percent higher than in October 2011 and was second only to Texas.

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