Drivers use more gas despite prices
06-09-05, 05:26 AM
#1
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Drivers use more gas despite prices
Posted 6/8/2005 10:24 PM
By Barbara Hagenbaugh, USA TODAY
WASHINGTON — U.S. drivers are using more gasoline despite near-record prices, a trend that could lead to even higher prices at the pump in coming weeks.
The four-week average for U.S. gasoline demand was up 2.9% from a year ago last week, which included Memorial Day, the unofficial start to the summer driving season, the Energy Department said Wednesday. That's the strongest year-over-year increase in four months and the sixth-consecutive weekly gain. Gasoline supplies could grow tight and prices rise if the trend continues, Alaron Trading oil analyst Phil Flynn says.
"Right now, supplies are adequate, but we are seeing warning signs that things could be changing," he says. Flynn notes that China also continues to have a strong appetite for oil, and that some U.S. refiners are switching some of their gasoline production to heating oil to cash in on an unexpected rise in prices in that market.
"We're still in a very volatile situation," Flynn says.
The increase in gasoline demand from a year ago comes somewhat as a surprise, given that prices are higher. When gasoline prices rose in October, for example, demand declined for four consecutive weeks from a year earlier.
American Petroleum Institute chief economist John Felmy says the increasing demand likely can be attributed to better weather, which encourages more car trips, and a strengthening economy, which leads consumers and businesses to drive more.
"It's everything coming together," he says.
Motorist club AAA said the average U.S. price for a gallon of regular unleaded gasoline was $2.118 Wednesday, up from $2.114 Tuesday and up 9 cents from a year ago. Although off from the record high, not adjusted for inflation, of $2.276 hit nearly two months ago, gasoline prices have risen every day for nearly a week, according to AAA. The increases have come as oil costs, which account for half the price of gasoline, rose in recent weeks in a roller-coaster market.
The price of light sweet crude fell $1.22 to $52.54 a barrel Wednesday after rising swiftly earlier in the trading day. It was the third-consecutive daily decline but still left prices slightly higher than a month ago and only about $5 off the record high hit in April.
Fred Rozell, retail pricing director at Oil Price Information Service, says given the usual lag between oil price changes and pump prices, not all the recent increases in oil prices have been passed through to gasoline. But while gasoline prices will likely continue to increase in coming days, the extent of the recent oil price gains were not enough to suggest gas prices are poised to surpass the records hit in April, he says.
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I' ve tried to avoid going to more distant locations for diner & other recreations during weekends since last year, & my monthly gas bills stays about the same.
By Barbara Hagenbaugh, USA TODAY
WASHINGTON — U.S. drivers are using more gasoline despite near-record prices, a trend that could lead to even higher prices at the pump in coming weeks.
The four-week average for U.S. gasoline demand was up 2.9% from a year ago last week, which included Memorial Day, the unofficial start to the summer driving season, the Energy Department said Wednesday. That's the strongest year-over-year increase in four months and the sixth-consecutive weekly gain. Gasoline supplies could grow tight and prices rise if the trend continues, Alaron Trading oil analyst Phil Flynn says.
"Right now, supplies are adequate, but we are seeing warning signs that things could be changing," he says. Flynn notes that China also continues to have a strong appetite for oil, and that some U.S. refiners are switching some of their gasoline production to heating oil to cash in on an unexpected rise in prices in that market.
"We're still in a very volatile situation," Flynn says.
The increase in gasoline demand from a year ago comes somewhat as a surprise, given that prices are higher. When gasoline prices rose in October, for example, demand declined for four consecutive weeks from a year earlier.
American Petroleum Institute chief economist John Felmy says the increasing demand likely can be attributed to better weather, which encourages more car trips, and a strengthening economy, which leads consumers and businesses to drive more.
"It's everything coming together," he says.
Motorist club AAA said the average U.S. price for a gallon of regular unleaded gasoline was $2.118 Wednesday, up from $2.114 Tuesday and up 9 cents from a year ago. Although off from the record high, not adjusted for inflation, of $2.276 hit nearly two months ago, gasoline prices have risen every day for nearly a week, according to AAA. The increases have come as oil costs, which account for half the price of gasoline, rose in recent weeks in a roller-coaster market.
The price of light sweet crude fell $1.22 to $52.54 a barrel Wednesday after rising swiftly earlier in the trading day. It was the third-consecutive daily decline but still left prices slightly higher than a month ago and only about $5 off the record high hit in April.
Fred Rozell, retail pricing director at Oil Price Information Service, says given the usual lag between oil price changes and pump prices, not all the recent increases in oil prices have been passed through to gasoline. But while gasoline prices will likely continue to increase in coming days, the extent of the recent oil price gains were not enough to suggest gas prices are poised to surpass the records hit in April, he says.
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I' ve tried to avoid going to more distant locations for diner & other recreations during weekends since last year, & my monthly gas bills stays about the same.
06-09-05, 08:20 AM
#2
Lexus Fanatic
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Gas prices are NEVER a deterrent to driving despite what people 'say' they will do. For decades Europe has been trying to cut back driving by jacking up gas prices and it's never worked. All that happens is people have less disposable income for other things.
06-09-05, 08:46 AM
#3
nah, the oil industry doesn't have us by the short-and-curlies or anything. 
I tell you what, if they were made more attractive from a price-point perspective, I would pick up some European style runabout in a minute. We had an Austin Cooper "Captain America"
when I was a kid in the 70's and I loved it. 
I tell you what, if they were made more attractive from a price-point perspective, I would pick up some European style runabout in a minute. We had an Austin Cooper "Captain America"
when I was a kid in the 70's and I loved it.
06-09-05, 09:01 AM
#4
Originally Posted by bitkahuna
Gas prices are NEVER a deterrent to driving despite what people 'say' they will do. For decades Europe has been trying to cut back driving by jacking up gas prices and it's never worked. All that happens is people have less disposable income for other things.
people will still drive like they drive
maybe when hybrid totally takes over....?
06-09-05, 10:05 AM
#7
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These reports are always premature, their timings are always off, and they're basically just telling us what we already know. But at least it gives these people something to do. Wait til it hits $3.50 and up, we'll hear another report long after the majority of people have already switch to alternative forms of transportation or to other more fuel efficient vehicles saying the people have switched.
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