Phillips 66
Phillips 66 gasoline service station Phillips 66

Weak U.S. demand for diesel fuel last month may be signaling that the nation’s economy is slowing, the chief economist for the American Petroleum Institute said Thursday.

John Felmy, commenting on the API’s latest monthly petroleum statistics, said the relatively weak increase in October demand for the low-sulfur diesel fuel that transport trucks use – up a mere 0.6 percent from 3.8 million barrels to 3.83 million barrels -- could reflect a weakness in domestic industrial activity.

“It’s something that warrants attention,” he said. “It may be reflective of a soft spot in the economy because it’s tied to the overall economy. Everything is shipped by diesel, and if you have a slowing economy you have less demand for diesel.”

Heating oil demand, however, soared last month more than 200 percent, most likely the result of unusually warm weather in October 2012, he said.

Meanwhile, the API’s October numbers reflected the continuing impact of the nation's shale oil boom. Domestic production soared to a 25-year high and crude oil imports tumbled to a 17-month low.

Specifically, domestic crude oil production increased by 11.7 percent from October 2012 but edged down 0.1 percent from September to nearly 7.8 million barrels per day in October, the highest level for the month in 25 years.

U.S. total imports and crude oil imports both fell to their lowest October levels in 17 years, the API said. Total imports dropped 0.1 percent to average slightly more than 10 million barrels per day in October while crude oil imports fell 0.5 percent to 8.1 million barrels per day.