Fuel Demand in U.S. Climbs in Q1

WASHINGTON, D.C. -- U.S. fuel demand rose in March, as prices climbed to their highest level in 30 months amid signs the economy is rebounding, according to the American Petroleum Institute (API).

Total deliveries of petroleum products, a measure of demand, climbed 7.3 percent to 20.5 million barrels a day last month from a year earlier, the industry-funded group said in a report. First-quarter deliveries gained 5.5 percent from the year-earlier period.

Gasoline consumption increased 6.1 percent to 9.32 million barrels a day from the same month last year, as first-quarter usage rose 4.1 percent to 9.01 million, API reported.

"The positive economic effects are outweighing some of the price effects," John Felmy, chief economist with the Washington, D.C.-based API, told Bloomberg.

Demand for distillate fuel rose 11 percent to 4.28 million barrels a day in March. Consumption of ultra-low sulfur diesel, the type used on highways, climbed 21 percent to average 3.29 million barrels a day, the API report showed. Quarterly figures showed distillate demand up 8 percent to 4.09 million. Ultra-low sulfur diesel use rose 13 percent to 3.24 million. ,p> API also reported record refinery production in both March and the first quarter of 2011. Gasoline output jumped 4.9 percent in March, and distillate fuel, a category that includes heating oil and diesel, increased 22 percent.

"There's a lot of product out there, it just costs more to make," Felmy said.