In its latest monthly energy forecast, the EIA said the huge drop in demand was due to slower US economic growth and the impact of high petroleum prices.

The drop in US oil demand helped offset a 1.3-million-barrel-per-day increase in petroleum consumption in nonindustrial countries during the first half of the year.

As a result, preliminary data shows that global oil consumption rose by 500,000 barrels a day in the 6-month period, the EIA said.

High gasoline prices have cut into US demand, but the EIA expects lower pump costs through December than previously forecast.

However, US consumers will be hit with much higher heating fuel costs this winter, the agency warned.

The average residential price for heating oil during the upcoming heating season, which runs from October through March, is forecast to be US$4.34 (S$6.10) a gallon, up 31 per cent from last winter.

Households that use natural gas as their heating fuel will pay an average US$15.58 per thousand cubic feet of gas, about 22 per cent more than last winter, the EIA said. -- REUTERS