A sluggish economy and an overall increase in the fuel efficiency of the U.S. vehicle fleet have reduced demand for gasoline to levels not seen since June 2004, according to the American Petroleum Institute. 

In June, the U.S. needed 9.18 million barrels of gasoline per day, 0.5% lower than a year ago, the group said. Despite the lower demand, gas prices continue to inch upward in 2010. According to the U.S. Energy Information Administration, the average price for a gallon of gasoline stood at $2.75, or 25 cents more than a year ago. However, that’s still far below the record highs in the $4 range in 2008. 

Energy demand is also a good barometer of economic health. In June, crude oil production increased 3.9% in the contiguous United States. The increase is mainly due to an increase in distillates, or fuel/heating oil.

U.S. oil production has been in a state of freefall since the 1980s. It has dipped from an average of nearly 9 million barrels a day in 1985 to about 5.5 million barrels today, according to the EIA. The U.S. still meets about 28% if its daily needs from domestic production, with about 3.1% of the total supply coming from Alaska.