by Cara Brosius
June 14, 2017
US demand for refined petroleum products is forecast to total 6.2 billion barrels in 2021. The increasing fuel efficiency of US motor vehicles in use and demographic trends will reduce consumption volumes of gasoline, the largest demand segment.
Although demand for gasoline and diesel fuel is quite volatile, demand for fuel used in necessary travel is inelastic, limiting instability to an extent. Throughout the 2006-2016 decade, the average retail price of both gasoline and diesel fuel fluctuated considerably due to underlying volatility in crude oil prices. The recession resulted in gasoline and diesel fuel prices falling drastically in 2009. After the recession, prices climbed, peaking in 2012 in response to escalating crude oil prices.
The following years saw declining prices: in 2016, average annual retail prices fell to a decade trough of $2.25 per gallon and $2.30 per gallon for gasoline and diesel, respectively. Oil-producing countries experienced relative political stability, and production levels of crude oil were high. Low crude oil prices have caused many companies, such as ConocoPhillips and Royal Dutch Shell, to cut costs by divesting from assets used in exploration and production operations.
The associated maintenance, insurance, and registration costs of motor vehicle ownership represent a major constraint for millennials and others considering a first-time purchase. Furthermore, government regulation has resulted in vehicle designs boasting improved fuel efficiency. As such, declining consumption of gasoline in the US is expected to continue through the forecast period.
For in-depth analysis of refined petroleum product trends, see Refined Petroleum Products: United States, a report published by the Freedonia Focus Reports division of The Freedonia Group.
The report contains historical data and analysis of refined petroleum product demand and production in barrels from 2006-2016 with projections to 2021. Demand and production are segmented by product type as follows:
While you’re there, you can check out other reports covering energy topics, such as Coal: United States and Crude Petroleum: United States.
Cara Brosius is a Research Analyst with Freedonia Focus Reports. She holds a degree in economics, and her experience as an analyst covers multiple industries.
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