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Falling US Gasoline Demand : A Weaker US Economy ?

( From Ecointersect , EIA, EconMatters, Science Monitor, Haver, Motley Fool, API, DShort )​

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Efficiencies



According to the U.S. Energy Information Administration, petroleum product supplied in the first 11 months of 2012 averaged 18.639 million barrels per day, 10.4% lower than 2005. Part of this drop is due to the recession that we're still recovering from, but efficiency is playing a bigger role than many people think.



Usage has dropped since 2010 despite growing GDP, and fuel efficiency standards are playing a role. The Obama administration passed a new CAFE standard of 54.5 mpg for auto manufacturers that takes effect in 2025. This is driving long-term planning, but the reason for better efficiency may be closer to the pump.





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The Situation



​​U.S. oil demand fell in February, dropping to its lowest level for the month in 20 years, industry group American Petroleum Institute said on Thursday.



February petroleum demand dipped 4.1 percent from a year earlier to 17.996 million barrels per day.

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​Gasoline demand dropped 3.1 percent in February to 8.356 million bpd, the lowest level for the month since 2001 as shown by the graph below.





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Reasons



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Gasoline Prices​​​

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U.S. consumers this year paid higher-than-average prices for retail gasoline earlier in the year because of refinery issues, complications from late-season hurricanes and market factors. The dip in gasoline consumption coincided with a spike in fuel prices during the month, with gasoline surging more than 42 cents a gallon from the end of January.



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US Traffic Volume Trends



​​The Department of Transportation's Federal Highway Commission has released the latest report on Traffic Volume Trends, data through January. Travel on all roads and streets changed by 0.5% (1.2 billion vehicle miles) for January 2013 as compared with January 2012. The 12-month moving average of miles driven increased only 0.24% from January a year ago .



You can see below on the graph, this data series from its inception in 1970 with the moving 12-Month vehicle miles driven total on all roads.

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The rolling 12-month miles driven contracted from its all-time high for 39 months during the stagflation of the late 1970s to early 1980s, a double-dip recession era. The most recent decline has lasted for 62 months and counting — a new record, but the trough to date was in November 2011, 48 months from the all-time high.



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For details : January 2013 Traffic Volume Trends from US Federal Highway Administration

Economy

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​​The U.S. economy grew at an average rate of 2.2 percent during the past three years, compared to a 2.5 percent average growth rate from 1989-2009. That may explain part of the slowing demand in gasoline...

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“Declining numbers for most of the key products isn’t consistent with a robust recovery,” said API Chief Economist John Felmy. “Although there’s been some encouraging news on employment and manufacturing, fuel demand is an important indicator of where the economy is – and it’s headed in a different direction.”

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