While petroleum demand increased in December and there have been many recent signs that the recession is over, depressed demand for diesel indicates that the economy is still struggling, said John Felmy, economist for the American Petroleum Institute, on Friday (1/15).

Total petroleum deliveries, which are a measure of demand, inclined 0.6 percent in December 2009 compared to December 2008, according to the API.

In its Short-term Energy Outlook released last week, the Energy Information Administration edged higher its expectations for retail gasoline and diesel fuel prices for 2010 from its projection in December. Triggering the revision were estimates for higher crude prices than previously expected, with the agency saying that the U.S. gasoline average will likely top $3 gal at some point during upcoming spring and summer.

The EIA, which is the statistical division of the Department of Energy, expects a $2.84 gal U.S. average for regular grade gasoline in 2010, up 1.0cts from December estimates and nearly 50cts above the 2009 average. For 2011, the agency expects retail regular grade gasoline to average $2.96 gal.