The US Gasoline Slide

Friday, June 20, 2008 | 11:15 AM

Yesterday, we noted the Beginning of Demand Destruction? Today, Oil has reversed, and  that thesis may be getting questioned.

For more on demand destruction, see today's WSJ:

"During the energy crunch of the late 1970s and early 1980s -- the last time gas prices were close to current levels in inflation-adjusted terms -- consumers sharply cut back their gas consumption. When prices dropped, demand rose again, but at a slower pace because of the embrace of more-fuel-efficient foreign cars.

This time around, the breadth of change in consumption patterns is even more dramatic, and, if oil prices stay near current levels, the decline in demand could be more sustained.

The slower economy means pinched consumers, as well as truck drivers delivering goods, are driving less. DOE economists estimate that a 1% decline in personal income results in a 0.5% drop in gasoline demand."

As the saying goes, your mileage may vary . . .

Peakga_20080619185658



>

Source:
Prices Curtail U.S. Gasoline Use   
Report Says 2007 Was Likely the Peak; An Enduring Shift
ANA CAMPOY
WSJ, June 20, 2008; Page A4
http://online.wsj.com/article/SB121392646391690835.html

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Friday, June 20, 2008 | 11:15 AM | Permalink | Comments (21) | TrackBack (0)
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Due to suburbanization and sprawl, the amount of miles Americans drive to work and do errands etc. is much higher today than in the 1970s. This makes it harder to reduce miles driven. Also, there are many more two and three worker households than in the 1970s, meaning lots more vehicle miles for work commuting today than in the 1970s.

Posted by: Douglas Watts | Jun 20, 2008 11:34:12 AM

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