Washington (Platts)--12Jan2010/639 pm EST/2339 GMT

Demand for liquid fuels in the US fell in 2009 by 810,000 b/d, or 4.2%, to 18.68 million b/d, the second consecutive annual decline, the Energy Information Administration said Tuesday in its Short-Term Energy Outlook.

The drop-off in demand was related to the weakening economy. Gasoline consumption, however, rose by a mere 0.1% during the year. Despite cold weather in December, average annual consumption of distillate fuel declined by 330,000 b/d, or 8.3%, EIA reported.

A slow but steady economic recovery in the US is expected to fuel a rise in demand in 2010 and 2011. EIA forecast assumed a growth in US real gross domestic product of 2% in 2010 and 2.7% in 2011.

Demand for liquid fuels is expected to rise to 18.9 million b/d in 2010 and 19.11 million b/d in 2011.

Domestic production of crude oil averaged 5.31 million b/d in 2009, up from the 4.95 million b/d in 2008, EIA reported.

The growth in production is expected to slow in 2010, with total production rising by only 130,000 b/d to 5.45 million b/d. Production is expected to fall slightly in 2011 to 5.42 million b/d.

Ethanol production continues to grow to meet the requirements of the Renewable Fuel Standard, EIA reported. Ethanol production averaged 690,000 b/d in 2009, but is expected to increase to 790,000 b/d in 2010 and 840,00 b/d in 2011.

--Gary Gentile, gary_gentile@platts.com