* Gasoline demand at Feb record on improving economy * API Feb oil demand lower than EIA's initial estimate (Adds demand for other oil products, supply and demand table) By Tom Doggett WASHINGTON, March 17 (Reuters) - U.S. demand for crude oil and petroleum products increased 0.6 percent in February from a year ago, with gasoline consumption hitting a record for the month as the American economy rebounded, the American Petroleum Institute said on Wednesday. February's total petroleum deliveries, excluding exports, averaged 18.823 million barrels per day, up 117,000 bpd from a year earlier, according to API's monthly supply and demand report. U.S. gasoline demand jumped 2.2 percent to a February record of 9.012 million bpd and gasoline production also set an all-time high for the month of 8.847 million bpd, the API said. "These numbers clearly show that the refining industry is making the gasoline (that) consumers are demanding ... which appears driven in part by some brightness in the economic picture," said API Chief Economist John Felmy. While gasoline demand set a record for February, it is far from the all-time monthly peak of 9.640 million bpd reached in July 2007. Deliveries of distillate fuels, which include heating oil and diesel fuel, fell 6 percent to 3.681 million bpd, the lowest for February since 1999. Jet fuel demand in February declined 4.1 percent to 1.285 million bpd, while residual fuel use soared 28.4 percent to 650,000 bpd. Deliveries, which are a good indicator of demand, are calculated by API to reflect petroleum products moved from refineries and bulk storage to wholesale and retail suppliers. API's U.S. petroleum demand figure for February is much lower than the U.S. Energy Information Administration's preliminary estimate of 19.356 million bpd for the month. On the supply side, crude oil and petroleum product imports averaged 11.377 million bpd in February, down 6.7 percent from a year ago. Total imports in February accounted for 60.4 percent of U.S. oil demand, down from 65.2 percent a year earlier. U.S. crude oil production increased 3.6 percent to 5.514 million bpd, the highest monthly output since June 2005. The number of rigs searching for U.S. oil in February rose 2.3 percent from a year earlier, according to Baker-Hughes Inc. Most of that gain was in North Dakota, where the number of rigs topped 100 for the first time in three decades. The following summarizes key data from API's monthly report: U.S. DELIVERIES, IMPORTS, PRODUCTION (million bpd) Feb Jan Feb Year Ago Jan-Feb YTD Pct 2010 2009 2009 Pct Change 2010 Change DELIVERIES Gasoline 9.012 8.770 8.816 2.2 8.885 1.5 RFG 2.942 3.057 3.064 -4.0 3.002 -0.4 Kerosene/jet 1.285 1.360 1.341 -4.1 1.324 -1.8 Distillate 3.681 3.578 3.915 -6.0 3.627 -9.3 Residual 0.650 0.559 0.506 28.4 0.602 -1.0 Other oils 4.267 4.215 4.018 6.2 4.240 2.4 Deliveries 18.823 18.407 18.706 0.6 18.604 -1.7 Exports 2.003 2.036 1.822 10.0 2.020 7.7 Total 20.826 20.443 20.528 1.5 20.624 -0.9 IMPORTS Crude oil 8.934 8.973 9.205 -2.9 8.954 -6.2 Oil products 2.443 2.366 2.986 -18.2 2.403 -24.0 Total 11.377 11.339 12.190 -6.7 11.357 -10.6 PRODUCTION Crude 5.514 5.446 5.320 3.6 5.478 4.9 Gasoline 8.847 8.770 8.810 0.4 NA NA Distillate 3.596 3.578 4.248 -15.3 NA NA Kerosene/jet 1.277 1.360 1.431 -10.8 NA NA Residual 0.576 0.559 0.554 4.0 NA NA

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