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API sees strong U.S. energy sector

Gasoline prices in an era of cheaper crude driving demand, industry group says.

By
Daniel J. Graeber
American Petroleum Institute said its data show a recovery emerging in the domestic energy market despite a depressed crude oil market. File Photo by UPI/Shutterstock/ekina
American Petroleum Institute said its data show a recovery emerging in the domestic energy market despite a depressed crude oil market. File Photo by UPI/Shutterstock/ekina

WASHINGTON, July 17 (UPI) -- Data published by the American Petroleum Institute show the U.S. energy sector is thriving, with consumption and production on the rise.

API reported gasoline demand in particular was on the rise, with deliveries from refineries increasing 2.6 percent during the second quarter compared to last year for the highest level for any month since August 2007.

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"Demand for and production of oil and refined products grew almost across the board over the last year," API Chief Economist John Felmy said in a statement. "Notably, gasoline demand last month reached the highest level since the summer of 2007."

Motor club AAA said U.S. consumers are reaping the economic impacts of lower gasoline prices during an era when crude oil markets are depressed. The $2.76 national average retail price for a gallon of gasoline is 23 percent, or 83 cents, less than this date in 2014.

Crude oil prices, meanwhile, are well below levels from last year. At $57 per barrel, Brent crude oil is down 45 percent year-on-year.

Crude oil prices are lower in part because the market is skewed heavily toward the supply side in a global economy climate weighed down by weak performance in countries like the United States and China.

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Nevertheless, API reports total U.S. petroleum deliveries, a measure of demand, grew 4.2 percent from May to June and 3.7 percent year-on-year. Crude oil imports, meanwhile, fell 1.1 percent to just under 7 million barrels per day.

A depressed crude oil market has forced most energy companies to spend less on exploration and production. Oil services company Baker Hughes in its latest report on the sector said the number of rigs actively exploring for or producing oil and natural gas in the United States declined 3.1 percent from May to 861 in June.

API reported crude oil production increased 12.5 percent year-on-year to 9.8 barrels per day on average last month.

"This was a new record level for the month of June and the highest for any other month since April 1971," the industry group said. "In the second quarter, crude oil production gained 12.9 percent year-over-year."

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