Demand for gasoline, the most widely used petroleum product in the world's biggest oil consumer, has been hit by the weak economy, high unemployment and gasoline prices that remain about one-third higher than year-ago levels. Demand on the East Coast been especially hard hit. MasterCard's SpendingPulse unit said East Coast demand in the week ended Aug. 19 was 4.2% to 4.9% below a year ago.
Overall U.S. oil "demand doesn't remain very healthy," said Kyle Cooper, managing partner at IAF Energy Advisors in Houston. "To see us at around 19 million barrels a day is pretty poor for this time of year."
Cooper said that while the overall U.S. economy "is not great, but not horrible either, the energy economy is clearly in recession." He said he expects a peaceful aftermath to Irene would knock crude prices down to the mid-$70 a barrel last seen in September.
September reformulated gasoline blendstock futures settled 1.1%, or 3.33 cents, lower at $2.9346 a gallon.
Heating oil for September delivery rose for a sixth day, gaining 2.46 cents, to $3.0101 a gallon, the most since Aug. 3. Heating oil has gained 4.7%, or 13.53 cents in the six-day rally.