As $4 Gas Approaches, Americans Buy Less

Picture 1The average price for a gallon of gas was up yet again over the weekend and is 11 cents higher than last week, settling at $3.77 nationally. At that rate we'll see $4 gas by early May, but drivers have already begun buying less gas.

Gas prices have been on a roller-coaster over the past three years. After experiencing new lows — gas cost $1.670 a gallon as of Dec. 29, 2008 — prices are once again near an all-time high. What’s worse is that high gas prices are possibly here to stay for the foreseeable future, industry experts say.

Drivers are already reacting to the change. Gas consumption has been down for five consecutive weeks, according to MasterCard Spending Pulse, which tracks 140,000 gas stations. In the first week of April, consumption was down 3.6%, or 2.4 million gallons of gasoline, the company said.

Average gasoline prices have stayed above the $3 level since early December 2010, according to the American Petroleum Institute, though the prices remain below the annual averages in 2008, when gas prices reached $4.062 when adjusted for inflation into February 2011 dollars. The increase in March means that gas prices have risen eight times in the past nine months, according to the U.S. Energy Information Administration.

“U.S. gasoline prices at the pump continue to climb and should average $3.80 per gallon next week,” Olivier Jakob of oil market analysis firm Petromatrix said Friday.

Gas prices are linked to the price of oil, which has also seen steady increases since the recent crisis in the Middle East. Speculation about Libya has accounted for about 60% of the volume of crude oil trading on the New York Mercantile Exchange since Feb. 15, according to KBC Energy Economics, an energy consultant.

One commodities expert suggests that high gas prices — even if not at $4 a gallon — could be here to stay through the end of 2012.

Of course, commodities trading is extremely volatile and speculative, and it doesn’t necessarily reflect all the facets of the real-world gasoline industry. But there aren't many experts painting a picture where pain at the pump will be alleviated any time soon.

Drivers Start to Cut Back on Gas as Prices Rise (The Associated Press)

By Colin Bird | April 11, 2011 | Comments (29)
Tags: In The News

Comments 

Stupid Democrat No More

President Obama Thank You for doing nothing while the price of gas has doubled during your Presidency. As much as I want to like you this wasn't the change I had in mind. Go Trump!

JM

"experts" also said that it would never snow again in London, and other "experts" said that gas was going to stabilize around $4 last time too. sorry, supply and demand will probably have us floating around the $2.50-$4 range for a while, as people buy less gas, prices go down, and people buy more gas and prices go up.

Ja

Obama will beat Romney, and Trump both unfortunately. Obama will make gas cheap for union workers only, that's how he'll do it.

Gas will hit $8 in June as the dollar falls from favor with foreign debt purchasers. The dollar will ignite into flames just as many albuquerque foothills homes will this summer from droubt wildfires. I'm planning on bugin out this summer and living off the land, fires will burn my house down and if they don't there will be riots here and eveywhere so its best to be away from urban areas. The nation is dead yall, we just haven't gotten a wiff of the stinch of death yet. Liberty is only what you make of it, the gov't will not uphold it as this nation falls.

Troy S.

Makes me even happier that I own a Civic.

Pete

I recently bought a Prius and look forward to voting against the incompetent schmuck that I helped put in the White House. I'm sick of his on the job training!

DodgeFan

The declining usage and proper demand response by US consumers but still high gas prices means the gas market are being manipulated. The fact that Libya is quoted here is problematic since most of the gas does not come from there for US consumer. Its to bad the US continues to listen to the wrong people that hurts consumers, oil companies, and nation. I hate experts because they say stuff that has nothing to do with the local oil market.

Tony

couple things I don't understand...
1. How is Obama or any other president can do anything about the gas? If the oil companies manipulating the facts, keeping full tankers at sea and so on, and so on...
2. What do you , people expect? 1.50 per gallon? Unrealistic. Get ready to pay $$$ no matter where this gas comes from.
3. Are you the same people who make a Pickup truck the most sold vehicle in America? In Europe it is a small VW, probably diesel too.
4. Make less children, so you don't need to buy a minivan. Only Americans and Asians produce more then 2 children per family. In Europe they don't make so many and they don't need minivans and 3-row SUVs.
5. Stop complaining! Obama didn't tell you to go and buy a big car with a big engine.

Box One

The main point is being missed here.

Every day, around 50,000 vehicles are sold in China with another 20,000 in rest of the world. In 2011-Q1, already 5 million vehicles were sold.

Expect prices to keep on increasing even after mid-east crisis and japan quake problem is resolved.

Its high time we jump into hybrids & smaller cars. Ideally all Taxis should move to Prius & Insight.

jstant01

Tony - I agree with you, except for #4, which I saw you make on another post about gas prices.

Having less children may seem like a short-term solution, but in the long-term, it will only make things worse. Many governments in Europe (most notably in Italy) are paying people to have kids. If you have a child in Italy, the government sends you a check for $8,000!

Don't underestimate the need for future taxpayers. That's a crass way of thinking about children, but it's true. You're going to want those 2.1 children to be here in USA paying taxes when it's time for your Medicare and Social Security (if we make it that long...)

Also, the U.S. birth/death rate is currently about equal. Any population increase is largely because of immigration.

Tony

jstant01,

I am with you on this. If everyone had 2 children it would be no problem. With 2 kids you can still get a sedan but with 3 or more...

I understand the need of population growth for many reasons. But still, Europe is extreme situation. Over there they simply don't have will or/and money to have children. This is why governments are heavily involved into this issue there. In Sweden both parents are entitled for long parental leave (sequentially). Now, I want to see my boss's face if I tell him that I need to stay off work for 3 months and then my wife will do it and I'll return. No kidding.

But in America some people are so "good". They go to other countries and bring HIV kids. One family got 7 of them. Now they need a minivan and welfare. Basically, this kind of people who are straining us all.

Amuro Ray

Wanna add to Box One comment above, "[E]very day, around 50,000 vehicles are sold in China." The result is that the decrease in our oil demand won't offset the needs somewhere else. Remember, oil is a world commodity too, so price won't be significantly affected by our usage alone.

The sales of vehicles in China are SO bad (that the amount is increasing in an unprecedented way) that
(1) China has curtailed sales of vehicles to some monthly limit; and
(2) Prices of used cars are now way more expensive than the new counterparts (due to the curtail). Note that SAME limit is applied on used cars, but the private dealers are able to go around it due to corruptions and law loopholes (it's extremely difficult to trace used car sales unlike the new ones).

You don't see that in America!

Dan

One thing is evident from the comments on this article:

High gas prices make people stupid.

Claude Z.

In the first 26 months under Bush gas rose 7%. Under President Obama in the first 26 months gas has risen 67%.

As a former options trader I know from first hand experience that if leadership even whispers the word 'drill' gas prices drop. Bottom line the cat is out of the bag as the world knows our President is a weak leader.

My apologies to the hard working regular Joe's as I voted for him. I fully expect to correct my error come 2012.

Belly

http://www.economist.com/blogs/democracyinamerica/2011/04/paul_ryans_budget

"America’s oil production has actually grown since Mr Obama took office, although perhaps not as quickly as it might have had his administration slashed regulation and rubber-stamped all drilling permits."

Obama is the source of all evils... As long as you don't bother to know anything about it.

Anonymous

Hello Claude Z

You are looking at the first 26 months of Bush, why not you look at the last 26 months of Bush.

We saw $2 gas under Bush
We saw $3 gas under Bush
We saw $4 gas under Bush

When Bush took over, Chinese bought 2 million vehicles, last year they bought 18 million vehicles.

In Simple : US President does not have anymore control over Oil. Its between the Saudi supply and Chinese demand.

Gas prices will keep on increasing until the last person in the world buys a vehicle.

Proud Liberal

Citing the Economist? What's next citing Soros as a defender of the GOP? It's well known the Economist editorial board is classical liberalism (at it's best).
Now I understand why my conservative friends would look at someone like you and refer to them as spineless even though I know they really mean "uneducated".

Proud Liberal

"Its between the Saudi supply and Chinese demand."

Wow the stupidity out there is astounding! The US imports 2.5x more oil from the Saudi's then the PRC.

When Obama took office the week of January 26, 2009 gas was $1.81 a gallon.

You are embarrassing.

Belly

Political airhead.

Proud Liberal

I agree you air and not a very intelligent one. It must suck knowing you are owned.

Weird, we're still getting 52 MPG in both of our Prius, the 2003 and 2010. We have two Prius because growing up in Oklahoma, I watched the oil fields get tapped out. But if folks want to drill more holes ... fine by me.

As for politics, well I still have spare change leaving the pump. I'll just send it to politicians who see reality the same way this happy, dual-Prius owner does.

Tony

I would stop drilling until last SUV rolls off the production line.
My neighbor has a wife, a child and 2 gas-guzzling SUVs.

Mark of Excellence

Just tell your neighbor to buy the new electric Toyota Rav4 that will be coming out next year. Then they can have an SUV without you blowing a gasket because they don't drive a compact Mazda like you.

Belly

I agree you air and not a very intelligent one. It must suck knowing you are owned.
-Good one "air." You got me.

Matt C

If they are declaring that gas is going to stay around $4, then I bet we are going to see a drop pretty soon.

The main reason pick up trucks are the biggest sellers, is because small businesses and construction companies need these vehicles to function and make money. Often times the small business owner will buy a truck or large suv and it will double as the family vehicle.

You anti-truck/suv guys need to look outside your cubicle to see that the way you live your life doesn't translate to the way everyone should live.

Anonymous

"When Obama took office the week of January 26, 2009 gas was $1.81 a gallon."

When Obama took office, 700,000 people lost jobs that month and the World's economy entered a massive recession and the problem started 2 years ago.

2009 was the year in which only 10.5 million vehicles were sold and also China overtook US for the 1st time.

Today economy is lot better and again the gas prices will rise every day along with Chinese output of vehicles.

Anonymous

bwilson4web

Congrats on having 2 Prius, by the time you consider replacing your 2003 Prius in a few years, there should be Plugin Prius or Leaf / Focus EV at lesser than 30K price tag.

Anonymous

"If they are declaring that gas is going to stay around $4, then I bet we are going to see a drop pretty soon."

Yes we are going to see a drop in SUV sales. In 2008, we saw the phase out of these 5 SUVs with V8 engines.

Trailblazer, Envoy, Aspen, Durango, Hummer-H2 and subsequently in 2009, H3 and Mariner went down.

In 2010, Explorer SUV was replaced by Explorer CUV which did not get V8.

Fez

Obama's accomplishments:
1. Gas doubled in priced.
2. Gitmo has increased in size.
3. Obama the Noble Peace Prize winning war monger running two wars just like GW.
4. 20 Million unemployed.
5. Coined a new phrase "Jobs Saved or created".
6. Continues to piss into the mouths of the American people telling them it just rain.

Check out my site for ways to save money on gas. www.BuyLessGas.com

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