U.S. Oil Demand Drops in November, Oil Inventories Rise

November oil product deliveries (a measure of demand) fell 7.4 percent from a year ago to the lowest November level since 1998, according to API’s Monthly Statistical Report.

“The decline in oil demand reflects the nation’s faltering economy,” said Ron Planting, manager, information and analysis for the American Petroleum Institute.

While U.S. product demand shrank, domestic crude oil production rose to 5.1 million barrels per day. That is 2.5 percent above November 2007 and continues a rebound from September’s hurricane-induced low.

A 12.5 percent decline in oil product imports in November easily masked a 1.6 percent increase in crude oil imports compared with a year ago. Combined imports of crude oil and products averaged 12.9 million barrels per day, their lowest level for November since 2003.

Crude oil inventories continued to rise in November, reaching 319 million barrels. This was 6.4 percent higher than a year ago and the highest monthly figure since August 2007. Product inventories also rose from October 2008: gasoline to just below year-ago November levels, distillates to within 1.6 percent, and jet fuel to about 4 percent less.

With the sharp fall in product demand, November inputs to crude distillation units (an overall measure of activity at refineries) were down 2.6 percent from a year ago but still more than 300,000 barrels per day above October 2008.