US gasoline demand will not peak again despite recovery

19 May 2009 15:05  [Source: ICIS news]

ROTTERDAM, Netherlands (ICIS news)--Gasoline demand in the US more than likely peaked in 2007 and will not reach those levels again, despite the market recovery in 2009, said a Wood Mackenzie consultant on Tuesday.

"We think the gasoline demand in the US is now being destroyed," said Mike Wilcox, head of downstream oil consulting, speaking at the Global Refining Summit.

"Gasoline demand probably peaked in 2007 and it will never be that high again. With the increase in ethanol in the gasoline pool, it will be even lower," he added.

This would be despite the noted pick-up in gasoline markets both in the US and in Europe, where typically diesel demand is stronger.

The International Energy Agency (IEA) released figures recently indicating that motor gasoline demand increased to 10.39m bbls/day in February from 10.25m bbls/day in January.

However, year on year, February registered a fall of 0.01m bbl/day, and Wilcox believed that there had been a culture shift in the US that was leading to gasoline demand destruction.

"There has been a change in America. Even after a partial recovery at the end of this recession, refinery demand for gasoline will still be 7% below 2007 levels, and getting lower all the time," he said.

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By: Alex Davis
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