On corner lots around the New York city suburbs, you’ll see something almost shockingly un-American. Gasoline stations sit vacant, their plate glass windows armoured with plywood. Ragweed pokes through the parking lots.
There are many reasons for this; among them, the rise of discount gasoline sold at big-box wholesale retailers on the highways. But the vacancies also underscore a stark fact: gasoline, demand is evaporating in the U.S., the world’s biggest oil consumer.
In the four weeks to August 12, U.S. gasoline demand was 9.163 million barrels a day, back to the recessionary levels of two years ago, according to preliminary energy department statistics issued this week. Revised data, available from May, show U.S. gasoline demand below 9 million b/d in that month for the first time since 2001.
Monthly data due Friday from the American Petroleum Institute are expected to show similar declines in domestic oil demand, led by gasoline.
Oil bulls treat the U.S. market as if it’s a Hummer, GM’s fuel-guzzling, rather gauche auto marque now discontinued in the wake of the financial crisis. The U.S. is old news, they say. Look at demand in China and the Middle East. It’s unstoppable!
They have a point: the International Energy Agency, even after noting an annual decline in June, projects China’s demand will this year rise some 550,000 b/d to 9.6 million b/d.
But demand trends go both ways. As it happens, China’s expected total oil demand in 2011 matches U.S. gasoline demand at its 2007 peak. The death of the Hummer -- not to mention a 9.1 per cent unemployment rate -- is a pretty effective means of freeing up oil supplies.
If companies start hiring again, presumably more people and their cars will frequent gasoline stations on their way to the work. But the U.S. energy information administration is not too hopeful: it predicts U.S. gasoline demand of 8.93 million b/d next year, just 50,000 more than this year, matching levels of 2003.