Domestic petroleum deliveries, a measure of demand, totaled 19.0 million bpd in July, a decline of 3.0 percent versus the corresponding 2008 period and “about half the average rate of decline during the first half of 2009,” the American Petroleum Institute reported last week in its latest Monthly Statistical Report.

“The data are consistent with reports that the economic downturn may be flattening out,” said Ron Planting, manager, information and analysis for the API. “However, U.S. oil demand is still significantly below where it was a year ago.

Gasoline deliveries for the month reviewed edged up 0.8 percent to 9.223 million bpd, while distillate fuel oil deliveries, including diesel fuel, marked their first month in almost two years without a significant dip. At 3.695 million bpd, the data showed distillate fuel oil deliveries edged up 0.2 percent versus July 2008.

Jet fuel deliveries in July sank nearly 12 percent from a year ago to 1.391 million bpd—their lowest level for the month since 1993. Residual fuel oil deliveries plunged 26 percent from July 2008 to 506,000 bpd last month.

Declines in domestic demand continued to weigh on refinery activity, with refinery inputs for July averaging 5.0 percent lower than July 2008 as output of most major products declined from a year ago. Gasoline production rose 2.8 percent from the prior year to 9.15 million bpd and year-to-date production “remained the second highest ever.” July’s average refinery utilization rate was 84.0 percent of capacity, the second highest monthly average since November and nearly 20 percentage points above the average utilization rate across all U.S. manufacturing industries.

API said inventories of most major products rose during July, with some of the products with the weakest demand reaching recent-year record levels. The largest volumetric increase was for jet fuel inventories, which gained 2.7 million bbl to 47.0 million bbl—the highest for any month since 1999. Gasoline inventories increased 3.2 million bbl to 215.3 million bbl, which is about 4 percent above the average for the last five years.

According to the data, distillate fuel oil inventories rose 1.0 million bbl to 158.1 million bbl—their highest monthly level since the 1980s. Crude oil inventories also inched upward in July after slipping in May and June, climbing to nearly 350.0 million bbl which is the highest level domestic commercial crude stocks have been for any July since 1993.

While the year-to-date average for U.S. crude oil production was close to 3 percent higher than a year earlier, July’s domestic crude oil production rate dropped, year-to-year, for the first time since October as pipeline maintenance slowed production in Alaska. Lower-48 production in July rose 1.0 percent from a year ago. U.S. production for January through July averaged 5.6 million bpd—the highest for the same period in four years.

U.S. petroleum imports in July dropped 10.3 percent from a year ago, with similar-sized declines for both crude oil and products. Year-to-date petroleum imports at 12.0 million bpd hovered more than 1.0 million bpd lower than a year earlier and 1.7 million bpd less than the record January through July level set in 2006.