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April 8, 2011

January 2011 gasoline demand reduced by snowy weather

After showing annual U.S. gasoline demand growth in 8 out of the last 9 months of 2010, January 2011 saw a particularly sharp decline that may largely be due to snowy weather. Based on data from the Petroleum Supply Monthly, published on March 30, 2011, finished motor gasoline product supplied (used as a proxy for demand) in January 2011 declined by 1.3% (about 113 thousand barrels per day) compared to January 2010, dropping to its lowest level for January since 2002. However, the decline in January probably reflects major snowstorms in the Northeast rather than a change in the recent trend of gasoline demand growth seen since April 2010.

In mid-January, a southern storm system combined with a Midwestern storm system that dumped large amounts of snow through the Ohio Valley. The combined storm struck the mid-Atlantic and New England States on January 12, 2011. The storm affected travel for several days in major metropolitan population centers across the Southern and Northeastern United States, including cities such as such as Atlanta, Raleigh/Durham, Philadelphia, New York, Providence and Boston.

The decline in January gasoline demand was entirely on the East Coast (PAD District 1) which was the region hit hardest by winter storms in January. Gasoline demand actually increased slightly in all other U.S. regions, compared to January 2010.

According to the National Oceanic and Atmospheric Administration's January 2011 State of the Climate National Overview, "January began with about 50% of the contiguous U.S. under snow cover and ended with about 42% snow covered, but the snow cover area varied with each snowstorm during the month, reaching a maximum of about 71% of the country on January 12th."