WASHINGTON (MNI) – The following text is the summary of the
American Petroleum Institute’s monthly report on domestic petroleum
deliveries, gasoline deliveries and crude oil production for August
released Friday:

U.S. consumer activity and industrial activity traced divergent
paths in August as distillate fuel deliveries hit record highs for the
month while motor gasoline deliveries fell to a 10-year low. The U.S.
economy struggled to gain traction with continued weakness in consumer
spending, a key measure that accounts for nearly two-thirds of the U.S.
economic activity. The latest data from the U.S. Department of Commerce
suggests that retail sales growth in the first two months of the third
quarter was weak as the political gridlock over the U.S. budget
continued to stall consumer confidence levels. Total domestic products
supplied rose slightly by 0.3 percent from last August to 19.7 million
barrels per day. Distillate fuel and jet fuel deliveries rose while
motor gasoline, residual fuel and other oils showed declines from last

Total motor gasoline deliveries fell by 1.3 percent from last
August to 9.1 million barrels per day. This level was higher than July’s
gasoline deliveries as retail gasoline prices fell in August from the
prior month. On a year-to-date basis, gasoline deliveries were lower by
2.0 percent compared with the same period in 2010. According to the
latest report on passenger miles driven by the U.S. Department of
Transportation, total miles travelled on U.S. roads in June were down by
1.4% from a year earlier and the reduced driving was probably in large
part a response to higher prices and a souring economy.

Distillate fuel deliveries were at a record high for the month of
August, up by 10.8 percent compared with August 2010, to reach 4.2
million barrels per day. Domestic deliveries and exports continued to
show year-over-year increases through the first eight months of 2011.
Deliveries of Ultra-low sulfur distillate fuel (ULSD), the kind used in
on-highway traffic, were up by 12.7 percent from last year at 3.8
million barrels per day. Modest expansion in U.S. manufacturing activity
increased trucking traffic due to the recovery from severe weather
impact such as the recent floods, earthquake and the hurricane in U.S.
and increased global diesel consumption could be possible reasons for
the increase in distillate fuel deliveries and exports.

According to the latest report from the Institute of Supply
Management, the Purchasing Manufacturers’ Index (PMI) registered 50.6
percent in August, a slower growth rate than July, but still an
expansion. High-sulfur distillate deliveries were down by 4.9 percent
and fell to a record low. Total distillate fuel deliveries were at their
highest since 2008 for the month. Petroleum exports recovered from July
and jumped to 2.5 million barrels per day up by 2.0 percent from August
2010 level.

Crude oil production fell to a three-year low for the month of
August and fell to its lowest levels in 2011. Compared with August 2010,
crude oil production, at 5.1 million barrels per day, was down by 5.5
percent. On a year-to-date basis, crude production was higher by 1.1
percent compared with 2010. Production in the Lower 48 states was down
by 6.3 percent to 4.6 million barrels per day. Alaskan production
recovered from losses in July to reach an average of 549 thousand
barrels per day in August, an increase of 2.0 percent compared with
August 2010.

Natural gas liquids production continued to ramp up through the
year and reached 2.2 million barrels per day, a 5.5 percent jump from
last year. In August, the total number of oil and gas rigs jumped by 57
to 1957, a three-year high, according to Baker-Hughes Inc. report. Total
domestic petroleum supply was 6.3 percent higher compared with last

Total imports of petroleum products were down from last year by
11.0 percent to a 14-year low, for the month of August, at 11 million
barrels per day. Crude imports fell by 1.8 percent to 9.4 million
barrels per day and product imports fell by 42.1 percent to 1.6 million
barrels per day, compared with last year. Canadian imports of crude oil,
a reliable source for the U.S. petroleum supply mix, showed a 7.0
percent jump from last year to average 2.1 million barrels per day in

Refinery inputs remained over 15 thousand barrels per day for the
third month in a row. At 15.4 million barrels per day, inputs were 1.4
percent lower than last year. Refined products production recovered from
July into August. Gasoline production, at 9.5 million barrels per day,
was up by 0.6 percent from last year and at a record high on a
year-to-date basis. Production of distillate fuel and jet fuel showed
7.2 percent increase respectively while residual fuel production rose by
5.8 percent. Distillate fuel production, at 4.7 million barrels per day,
was at a record high for the month and for the year.

For the third time this year, crude oil stocks showed year over
year declines as crude imports and inputs declined compared with the
prior year. Stocks of crude oil (excluding SPR) fell by 0.6 percent from
the prior month and 2.7 percent from the prior year. This stock level
was, however, still the second highest for any August since 1990, after
August 2010. Total stocks of oil and products were down 6.5 percent from
last year and down 0.7 percent from June 2011 levels.

Motor gasoline stocks fell on a monthly and yearly basis to 210.0
million barrels. This stock level was still the second-highest for the
month of August since 1998. Distillate fuel stocks rose from July levels
but were down from last August by 8.0 percent. At 156.5 million barrels,
distillate fuel stocks were at the third-highest level for the month of
August since 1981. Inventories of residual fuel, jet fuel and unfinished
oils were down from the prior month and the prior year.

** Market News International Washington Bureau: 202-371-2121 **