December's total petroleum deliveries, excluding exports, averaged 19.471 million barrels per day, up 234,000 bpd, from a year earlier, according to the API's monthly supply and demand report.

Deliveries, which are a good indicator of demand, are calculated by the API to reflect petroleum products moved from refineries and bulk storage to wholesale and retail suppliers.

US oil demand was bolstered by rising use of distillate fuels, which include diesel and heating oil. Distillate demand rose 6.9 percent to 4.128 million bpd in December.

"The robust distillate numbers suggest the nation's industrial sector continues to rebound," said API chief economist John Felmy.

Consumption of low sulfur diesel, used by trucks hauling goods, jumped 16 percent in December as rising online shopping during the holiday season spurred more shipping.

Overall, oil consumption rose 2.3 percent to an average of 19.196 million bpd in 2010 compared with a year earlier.

API's demand figure for December is less bullish than the US Energy Information Administration's estimate of 20.0 million bpd for the month.

US gasoline demand for the month fell 0.8 percent to 8.857 million bpd, as bad weather and higher prices kept people off the roads, Felmy said.

Jet fuel demand in December grew 8.6 percent to 1.490 million bpd, while residual fuel demand fell 13.4 percent to 504,000 bpd.

On the supply side, US crude oil production increased 1.3 percent to 5.524 million bpd.

Crude oil and petroleum product imports averaged 10.607 million bpd in December, up 0.8 percent from a year ago.

Total imports in December accounted for 54.4 percent of US oil demand, down slightly from 54.6 percent a year earlier.