Demand For Oil Products Falls
Kurt Brouwer July 23rd, 2008
U.S. Oil Demand Falls In First Half of 2008 (API, July 21, 2008, Bill Bush)
U.S. oil demand was significantly down for the first six months of 2008, API said today in its Monthly Statistical Report. While U.S. refiners churned out record and near-record amounts of oil products, imports – especially product imports — fell substantially.
Deliveries of all oil products – a measure of demand – fell 3.0 percent compared with the same first-half-year period in 2007, with gasoline deliveries slipping 1.7 percent. For the preceding three years, oil demand had essentially held steady.
API statistics manager Ron Planting said, “At 20.08 million barrels per day, total demand was the lowest in five years. And the decline in gasoline demand was the first significant one recorded in 17 years. Higher pump prices and a slowing economy were undoubtedly factors.”…
As we saw in the previous post, the supply of oil will be going up a bit as the new Alaskan fields come on line beginning in 2010. Now, we see that demand for oil products has fallen due to higher prices.
Individually, these changes in supply and demand are not hugely meaningful. But, millions of such decisions are being made each and every day. Oil producers want to produce more to take advantage of higher prices. Consumers want to use less because of high prices. These forces — supply and demand — operate all the time. As demand falls and supply increases, prices should stabilize. Who knows, they might even continue the recent downward momentum.
I do hope they do not go down too much though. That may sound contradictory, but I believe high prices for oil will stimulate the growth of alternative energy sources and, in the long run, that’s a good thing. See Oil Prices — Too Low For Too Long and A New Strategy for Energy Independence — T. Boone Pickens.
- Business , Economy , Geopolitics , Money
- Comments(0)
Did you enjoy this article?
