Total U.S. petroleum demand in January continued a long string of monthly declines against the previous year, although at a more moderate rate, said API in its most recent Monthly Statistical Report released last week.

Overall demand in January, as measured by domestic deliveries, totaled 19.5 million bpd, a decline of 3.1 percent from the 20.114 million bpd during January 2008. The decrease is nearly half the 6.0 percent demand drop for full year 2008.

“All told, weak demand across the board has given us the lowest deliveries for January in seven years,” said Ron Planting, API statistics manager.

A record rate of production of gasoline in the United States during the month of January snuffed out the bullish effect that increased demand for the transportation fuel during the month would have had, said John Felmy, chief economist for the American Petroleum Institute.

Felmy said since margins became positive last month, refiners recognized a chance to take a profit and increased their production.

“Large companies follow this [model] consistently so they aren’t whipsawed by the market,” he said.