Total consumption fell by 340 thousand bbl/d (1.8 percent) last year. Motor gasoline consumption accounted for the bulk of that decline, shrinking by 260 thousand bbl/d (2.9 percent). In 2012, total consumption falls by a further 170 thousand bbl/d (0.9 percent). The year‐over‐year decline in total consumption narrowed from 680 thousand bbl/d in the first quarter of 2012 to 110 thousand bbl/d in the second quarter. In the third and fourth quarters of 2012 EIA expects a turnaround in total liquid fuels consumption with a smaller year‐over‐year decline of 30 thousand bbl/d (0.2 percent) in the third quarter and a projected year‐over‐year increase of 120 thousand bbl/d (0.6 percent). Most of the recovery comes from natural gas liquids, which rise because of continued growth in industrial use and the assumption of near‐normal weather this coming winter.

In 2013, total liquid fuels consumption grows by 60 thousand bbl/d (0.3 percent), led by a 50‐thousand‐bbl/d (1.2‐percent) increase in distillate consumption and 30 thousand bbl/d growth in liquefied petroleum gas consumption. Despite an assumed increase in the growth rate of U.S. real disposable income from 1.1 percent in 2012 to 1.7 percent in 2013 and projected declines in retail pump prices of almost 6 percent in 2013, forecast motor gasoline consumption declines by 30 thousand bbl/d (0.4 percent). Gasoline consumption continues to fall because of slow growth in the driving‐age population, the acceleration of improvements in the average fuel economy of new vehicles, and increased rates of retirement of older, less‐fuel‐efficient vehicles.

Domestic crude oil production increased by an estimated 210 thousand bbl/d (3.9 percent) to 5.7 million bbl/d in 2011. Forecast U.S. total crude oil production increases to 6.3 million bbl/d in 2012, the highest annual level of production since 1997. Forecast lower‐48 onshore crude oil production grows by a robust 670 thousand bbl/d in 2012 and output in the Gulf of Mexico stabilizes after having fallen last year, but Alaskan output continues to decline by 30 thousand bbl/d. In 2013, total crude oil output rises a further 390 thousand bbl/d, most of which is accounted for by increases in lower‐48 onshore production. That increase is driven by increased oil‐directed drilling activity, particularly in onshore tight oil formations. The number of onshore oil‐directed drilling rigs reported by Baker Hughes has increased from 777 at the beginning of 2011 to 1,191 at the start of 2012, and to 1,429 as of August 3, 2012.

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