API says demand for gasoline down, but up for diesel in 2006

| 7/21/2006

As prices have shot up, the demand for refined crude product such as gasoline has dropped, while diesel demand has been on the rise, according to a mid-year review released by the American Petroleum Institute.

The API, which represents oil and natural gas companies, reported that demand for refined product – measured as deliveries from the primary distribution system of refineries, bulk terminals and pipelines – was down 1.3 percent in the first half of 2006 when compared to 2005.

However, the exception was for on-highway diesel, where demand actually increased as the volume of goods transported to consumers by truck increased, according to the report.

Overall stocks of crude oil are up 3.2 percent from levels in 2005. Stocks of distillate fuel oil, which is used to make diesel, are up 8.6 percent from 2005.

The report also said U.S. refiners began producing “substantial quantities” of ultra-low sulfur diesel in June and were up to 2 million barrels per day by the end of the month.

Imports of refined oil were up more than 12 percent for the first half of the year as more product was brought in to fill supply gaps left by refiners still struggling to get back online following damage from Hurricane Katrina in 2005.