Discoveries

U.S. oil demand is dwindling. According the American Petroleum Institute, 2008 domestic petroleum demand sagged to the lowest level since 2003, due to stratospheric prices early in the year and a suffering economy in the latter half of 2008.

Petroleum deliveries were 19.4 million barrels per day in 2008, a 6% decline from 2007 levels. Drops were seen across all major products, including gasoline, distillate fuel oil, jet fuel and residual fuel oil. The 1.2-million-barrel-per-day slump in U.S. demand was hefty enough to offset demand growth in developing countries.

According to API, domestic production of crude was less than 5 million barrels a day last year, a level not touched since 1946. Major oil-producing regions Alaska and the Gulf of Mexico both contributed to the production fall; Alaskan fields are aging, and Gulf of Mexico oil was forced off line by hurricanes Gustav and Ike.

Imports of crude oil and products also fell in 2008, to a five-year low of 12.9 million barrels per day. Crude imports alone were less than 10 million barrels a day.

–by Peggy Williams, Senior Exploration Editor, Oil and Gas Investor

Contact me at pwilliams@hartenergy.com

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