Economists use several statistical indicators, including the consumption of diesel fuel, to monitor the state of the economy. Therefore, last month's sharp drop in demand for Ultra Low-Sulfur Diesel (ULSD) fuel was cause for concern.

According to API's Monthly Statistical Report issued last Friday, demand for ULSD fuel dropped 11.5 percent from last January's level to 2.7 million barrels per day. ULSD fuel is used by trucks shipping goods on highways across America. "Looking at this number," API's Chief Economist John Felmy said, "you can see that the economic recovery is still mixed."

The report also found that total petroleum deliveries fell 3.8 percent to 18.4 million barrels a day in January 2010 from the same month a year ago. However, January gasoline deliveries were up over last year's level, rising 0.9 percent to average 8.8 million barrels a day. Even with the slight increase, gasoline demand was far below the peak of 9.6 million barrels a day reached in July 2007. Some observers believe that gasoline demand might never approach the levels seen in 2007 and 2008.

Another key economic indicator is the unemployment rate, which continues to hover just below the 10 percent mark. John Felmy says the oil and natural gas industry could create hundreds of thousands of new well-paying jobs and help the weak economy if it were allowed to expand energy development here in the United States.

John discussed the industry's economic benefits in an interview with blogger Kevin Holtsberry at the Conservative Political Action Conference (CPAC) in Washington last week. John's complete interview is available here.