olddawggreen
04-21-2006, 10:56 AM
Article fro USA TODAY, 4/20/2006
DRIVERS CURB USE AS GAS GOES UP
CUTBACK COULD CUT PRICE AT THE PUMP
By James R. Healey, USA TODAY
Americans have cut back gasoline use in apparent response to increasing prices, separate surveys by the government and a petroleum trade organization showed Wednesday.
Gas use last month was 0.6% less than a year ago, the American Petroleum Institute reported, because "high fuel prices have led to decreased demand for gasoline and other refined oil products."
The U.S. Energy Information Administration (EIA) said gasoline use the past four weeks was up a slight 0.8% vs. a year ago. Typical is an increase of 1.5%, and that's the growth rate assumed in many industry, analyst and government forecasts.
Cutting back just a little more could cause gasoline prices — which average $2.801 nationwide, up 57.7 cents from last year, according to motorist organization AAA — to drop dramatically, one veteran analyst says.
"If everyone decided to drive 3% less the next 30 days, prices would crash," says Tom Kloza, senior analyst at the Oil Price Information Service.
He doubts that Americans could manage that — "We know how well appeals to personal sacrifice work" — but still foresees less-than-normal growth in gasoline consumption this year.
"There's a point where it really hurts," he says. "There could be a little more carpooling, and there will be. It's approaching the point where that could happen."
Gasoline is made from oil, and oil prices are setting daily records this week, closing at $72.17 a barrel Wednesday, up 82 cents from Tuesday's close. Oil would have to top $86.99 to set an inflation-adjusted record.
Fuel conservation might be short-lived. For one thing, prices are likely to drop. EIA says, "Significant increases in gasoline production ... over the next several weeks should stem the rise in gasoline prices and may, actually, cause them to decline somewhat."
EIA says, "While the average U.S. price of regular gasoline could reach $3 per gallon sometime this year, that outcome is by no means a foregone conclusion."
History shows that as long as gasoline is available, at whatever price, Americans tend to adjust to the price and resume their previous driving habits.
"There's definitely some evidence of consumers adjusting," says Rakesh Shankar, an economist who watches energy for Moody's Economy.com.
Last time gasoline consumption dropped significantly was September, because of high prices and spot shortages caused by Hurricane Katrina's damage to energy operations in the Gulf of Mexico.
Demand continued to slide for a while after that, but it does so routinely in the fall and winter. So it's difficult to separate Katrina-sparked conservation from seasonal patterns.
Contributing: Barbara Hagenbaugh
Posted 4/20/2006 1:27 AM ET
Hmmm, another point of view from another expert.
:thinking: :D
DRIVERS CURB USE AS GAS GOES UP
CUTBACK COULD CUT PRICE AT THE PUMP
By James R. Healey, USA TODAY
Americans have cut back gasoline use in apparent response to increasing prices, separate surveys by the government and a petroleum trade organization showed Wednesday.
Gas use last month was 0.6% less than a year ago, the American Petroleum Institute reported, because "high fuel prices have led to decreased demand for gasoline and other refined oil products."
The U.S. Energy Information Administration (EIA) said gasoline use the past four weeks was up a slight 0.8% vs. a year ago. Typical is an increase of 1.5%, and that's the growth rate assumed in many industry, analyst and government forecasts.
Cutting back just a little more could cause gasoline prices — which average $2.801 nationwide, up 57.7 cents from last year, according to motorist organization AAA — to drop dramatically, one veteran analyst says.
"If everyone decided to drive 3% less the next 30 days, prices would crash," says Tom Kloza, senior analyst at the Oil Price Information Service.
He doubts that Americans could manage that — "We know how well appeals to personal sacrifice work" — but still foresees less-than-normal growth in gasoline consumption this year.
"There's a point where it really hurts," he says. "There could be a little more carpooling, and there will be. It's approaching the point where that could happen."
Gasoline is made from oil, and oil prices are setting daily records this week, closing at $72.17 a barrel Wednesday, up 82 cents from Tuesday's close. Oil would have to top $86.99 to set an inflation-adjusted record.
Fuel conservation might be short-lived. For one thing, prices are likely to drop. EIA says, "Significant increases in gasoline production ... over the next several weeks should stem the rise in gasoline prices and may, actually, cause them to decline somewhat."
EIA says, "While the average U.S. price of regular gasoline could reach $3 per gallon sometime this year, that outcome is by no means a foregone conclusion."
History shows that as long as gasoline is available, at whatever price, Americans tend to adjust to the price and resume their previous driving habits.
"There's definitely some evidence of consumers adjusting," says Rakesh Shankar, an economist who watches energy for Moody's Economy.com.
Last time gasoline consumption dropped significantly was September, because of high prices and spot shortages caused by Hurricane Katrina's damage to energy operations in the Gulf of Mexico.
Demand continued to slide for a while after that, but it does so routinely in the fall and winter. So it's difficult to separate Katrina-sparked conservation from seasonal patterns.
Contributing: Barbara Hagenbaugh
Posted 4/20/2006 1:27 AM ET
Hmmm, another point of view from another expert.
:thinking: :D