21 May 2010 16:45 [Source: ICIS news]
(adds updates throughout)
HOUSTON (ICIS news)--US gasoline demand continued its upward trend in April amid improved refinery operating rates, with production levels the highest on record for April and the second-highest for any month overall, the American Petroleum Institute (API) said on Friday.
Refineries produced 9.1m bbl/day of gasoline in April 2010, up 2.2% from 8.9m bbl/day in April 2009 and trailing only the 9.3m bbl/day produced in March, the trade group said in its monthly statistical report.
Operating rates for US refineries surged, bounding above 85% for the first time this year. The 85.5% utilisation rate exceeded March’s rate of 82% as turnarounds and routine maintenance activity wrapped up, the API said.
“US refiners are meeting the gasoline demands of American consumers,” API chief economist John Felmy said. “We are seeing that in production statistics, in refinery utilisation rates and in motor gasoline inventories.”
Despite increasing demand and the approaching summer driving season, the higher inventory levels for gasoline and crude oil were beginning to pressure prices, the group said.
Speaking on a conference call for the report, Felmy noted that the rate of crude and gasoline’s sharp price drop in May was greater than the increase rate when prices moved higher in February.
For gasoline, prices had fallen at a rate of about 0.7 cents/day this month, compared with an average increase earlier this year of 0.4 cents/day, he said.
According to US Energy Information Administration (EIA) figures, refiners reduced operating rates in the first two weeks of May amid the rapidly-dropping prices. That, in turn, lowered production of chemicals such as propylene.
US distillate deliveries grew 6.7% over April 2009 levels, reversing recent year-over-year declines. Distillate deliveries had weakened 29 out of the previous 30 months dating back to October 2007, as they usually have a strong correlation with broader economic activity.
Felmy said since the advent of low-sulphur diesel in 1994, there had been a correlation between the quarterly demand for product and gross domestic product (GDP) of about 96%.
Deliveries of low-sulphur distillate climbed 3% in April, marking only the third monthly increase in low-sulphur deliveries since June 2008, the API said.
US petroleum deliveries, however, measured 19m barrels - the second-lowest level for April deliveries since April 2000, according to the trade group.
Domestic crude production continued near five-year highs at 5.5m bbl/day, up 4.2% year-over-year but down 0.4% from March.
Reporting by Sheena Martin
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