Washington (Platts)--19Feb2009

The continued rise of US gasoline prices since the last week in December
was mainly due to higher demand, with consumers taking advantage of prices as
much as 40% lower than a year ago, the American Petroleum Institute's chief
economist said Thursday.

The average US gasoline price last week was $1.96/gal, up 22% from
$1.61/gal the last week in December, according to the US Energy Information
Administration Wednesday. Before the end-December week, gasoline prices had
fallen for 16 straight weeks beginning mid-September, EIA data showed.

While January typically shows the least US gasoline consumption, as cold
weather restricts travel and most activities on the East Coast and in the
Midwest are confined indoors, "lower prices tend to increase demand," said
API's John Felmy in a conference call with reporters. This has prompted
increases in gasoline production in a month when most refineries trim their
output for maintenance, he said.

"Demand for gasoline deliveries did go up," with imports increased as
well, Felmy said.

According to API Wednesday, gasoline demand rose 1.7% to 8.96 million
b/d for the month, compared with last year. It was the first year-over-year
gain in gasoline demand since September 2007, when API recorded a 0.2%
increase, said Ron Planting, API's head of statistics.

US finished gasoline production rose 1.7% from year-ago levels to 8.919
million b/d, a record for January, according to API.

--Daniel Goldstein daniel_goldstein@platts.com