The American Petroleum Institute said poor economic performance was pushing demand for petroleum products downward in the United States. Meanwhile, a survey published Monday by the Pew Research Center finds that a growing number of younger Americans are concerned about their long-term economic welfare despite emerging signs of recovery. API, in its latest market assessment, found those fears spilled over to the U.S. petroleum sector, where demand was down nearly 4 percent compared to last year.
A national survey of more than 2,500 adults by the Pew Research Center found a three-year stock rally and steady signs of economic improvement did little to allay concerns about long-term economic prospects for adults between the ages of 36 and 40. More than 50 percent of those interviewed said they had little confidence their income will keep them going into retirement. That represents a "major shift" in demographics, as about 34 percent of those respondents moving closer to retirement age expressed similar concerns.
For its part, API said that, for September, petroleum deliveries, a key indicator of market demand, fell to 18.2 million barrels per day, a 3.8 percent decline compared to last year and the second-lowest level for the month since 1996.
"The September demand numbers indicate there’s still substantial weakness in the economy," said API chief economist John Felmy. "While manufacturing and employment have improved some, we’ve yet to see strong momentum developing."
Pew found that the median net worth of U.S. adults in their 30s and 40s was 56 percent lower in 2010 than reported for the same demographic in 2001. The survey group said that's the steepest decline for any age group and more than twice the rate for those aged 55 to 64. That translates to less consumer demand, a sentiment backed by API.
For gasoline, a benchmark for U.S. consumer sentiment in the energy sector, API reported deliveries were down 3.6 percent in September to their lowest level since 2001, the same year Pew saw a vibrant 30-something demographic. Nevertheless, API took note of the 0.3 percent decline in the U.S. employment rate. In September, about 7.8 percent of Americans were out of work, the lowest rate since U.S. President Barack Obama took office in January 2009.
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Executive Director of the IEA Maria Van der Hoeven, meanwhile, said there were few signs of catastrophe in terms of global energy supply despite a string of unsettling news. Iranian crude oil exports have declined steadily in the face of mounting sanctions pressure. TransCanada, the pipeline company planning the much-lauded Keystone XL pipeline, shut down the existing artery, leaving hundreds of thousands of barrels of crude oil transports idled in the United States. Meanwhile, Britain's largest oil field, the North Sea Buzzard, is closed at least through Friday. Market reports described Monday's session as "choppy" for oil, though Van der Hoeven said there was no need for alarm on the supply side. While crude oil levels from some markets were declining, she said, a boom in North American shale was more than making up the difference.
"The market is sufficiently well supplied," she said.
With demand, weakening, however, and consumer sentiment reshaping the American landscape, it's no wonder there are ample supplies on the market. Pew found that during the last 10 years, only American households led by adults 65 and older saw their wealth increase.
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"Not only did adults in their mid-30s and early 40s lose the largest percentage of their wealth in the past ten years, but they also lost the most money," the survey found.
By. Daniel J. Graeber of Oilprice.com
