Wednesday, July 23, 2008

Will You Drive More Just Because the Price is Lower?

Gas prices slid down from just over $4 to around $3.85. So what's your reaction?

Is it...Whoo Hoo! Feels like gas is affordable again!

Or maybe...Better fill up before it goes up.

Or even...Big deal, it's still too much.

by Chris_J
Prices are likely to remain below $4 for a good while since barrel prices have steadily declined. Hurricane Dolly isn't expected to threaten supply and investors are pulling out of the oil market. The September barrel delivery is now down to $126.85 down from $147 just a week ago.

But the less sexy yet more exciting news is that of fuel demand. A study by MasterCard reports that U.S. gasoline demand dropped last week for the thirteenth week in a row. Demand fell 3.3% compared with the same week a year earlier, according to the survey. Since the start of 2008, gasoline demand is down 2.2%. And as investors view oil as less attractive to consumers they'll continue to consider it a less than desirable acquisition. In turn prices could decline.

Did the summer price spike increase your level of awareness? Will your new reduced driving habits continue? Or will your old habits return as colder weather arrives?

No comments:

Post a Comment