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04-11-2011, 06:18 PM
By Chris Kahn, Associated Press
NEW YORK — With the price of gas averaging $3.77 a gallon Monday, there are signs that Americans are cutting back on driving, reversing a steady increase in demand for fuel
Gasoline sales have fallen for five weeks, first time that has happened since November, according to MasterCard SpendingPulse, which tracks spending at 140,000 service stations nationwide.
Before the decline, demand had increased for two months. And some analysts expected that trend to continue because the economic recovery is picking up, adding 216,000 jobs in March.
STORY: Shift began a month ago
MORE: State by state gas prices from AAA
BLOG: What cities have the highest, lowest prices for gas?
“More people are going to work,” said John Gamel, director of gasoline research for MasterCard. “That means more people are driving and they should be buying more gas.”
Instead, about 70% of the nation’s major gas-station chains say sales have fallen, according to a March survey by the Oil Price Information Service. More than half reported a drop of 3% or more — sharpest since the summer of 2008, when gas soared past $4 a gallon.
This year, gas prices shot up as unrest in North Africa and the Middle East rattled energy markets and increased global demand for crude oil squeezed supplies.
Now, only Wyoming has an average gasoline price lower than $3.50 a gallon. Gas is already 41 cents more expensive than at this point in 2008, when it peaked at $4.11 in July.
Most analysts are sticking to forecasts of a high of $4 a gallon, though some have predicted $5 gas.
Across the country, some drivers are hunting for cheaper gas with the help of a mobile phone app. Others are reconsidering mass transportation, or trading in their SUVs for a more fuel-efficient vehicles.
Kim Cramer, who works for Radio Flyer in Chicago, has started walking and carpooling. She’s also learned to be choosy, buying gas in suburbs, where she’s learned she can save as much as 20 cents a gallon.
“I try to fill up anywhere besides the city,” she said.
About two-and-a-half days’ worth of Whitney Shaw’s pay each month goes to fill up her 2001 Hyundai Accent. The administrative assistant is thinking about taking the bus for her daily commute, 50 miles each way between Branford, Conn., and Hartford.
“It’s three hours of pay from work just to fill up my tank even once, so I’m definitely feeling it,” Shaw said while filling up for $3.61 a gallon at a Valero station on the Berlin Turnpike.
Some Americans also are turning to smaller, more fuel-efficient cars. Sales of Hyundai Sonata and Elantra soared 55% in March, while sales of Chevy’s Suburban SUV dropped nearly 24%.
MasterCard’s report shows drivers bought 2.7 billion gallons of gas last week, down 3.6% from the same period in 2010, when it was 80 cents a gallon cheaper.
The decline is somewhat puzzling because Americans typically curb their driving only as a last resort, after sacrificing other forms of discretionary spending, like shopping for clothes, or going to movies, concerts and restaurants.
But demand for gas is falling while other types of spending are on the rise. Retail sales rose 2% in March compared with a year earlier, surprising economists who were expecting no increase or even a decline.
Gamel said it’s too early to tell whether this is the kind of long-term decline in gasoline demand that the economy endured during the recession. Prices already are in the range where Americans started to leave their cars parked several years ago. Drivers began to cut back on gas in October 2007, when the national average approached $3 per gallon.
Even if demand for gas keeps falling in the U.S., it probably won’t be enough to force the price down. That’s because worldwide demand for crude oil keeps rising.
Global demand for oil is about 87 million barrels a day, matching its peak, in 2007. It is expected to grow to more than 88 million barrels a day by year end, with most of the increase coming from China. At the same time, supply is shrinking because of uprisings in Libya and elsewhere in the Middle East.
In the United States, people are watching their local gas stations a little more carefully. Some are even getting rid of their old gas-guzzler.
Andrea Meyer of Manteno, Ill., has done both. She buys gas in the middle of the week because prices seem to jump over the weekend. And she recently sold her 2005 Chevy Envoy SUV and bought a 2011 Chevy Cruze, which gets 30 miles per gallon. She still spent about $200 on gas for the new car from mid-February to mid-March.
“I won’t go hungry tomorrow,” she says. “It’s just taking away from me getting ahead faster. It throws off everything. It immediately makes you reprioritize.”
http://www.usatoday.com/money/industries/energy/2011-04-11-gasoline-sales-drop.htm
NEW YORK — With the price of gas averaging $3.77 a gallon Monday, there are signs that Americans are cutting back on driving, reversing a steady increase in demand for fuel
Gasoline sales have fallen for five weeks, first time that has happened since November, according to MasterCard SpendingPulse, which tracks spending at 140,000 service stations nationwide.
Before the decline, demand had increased for two months. And some analysts expected that trend to continue because the economic recovery is picking up, adding 216,000 jobs in March.
STORY: Shift began a month ago
MORE: State by state gas prices from AAA
BLOG: What cities have the highest, lowest prices for gas?
“More people are going to work,” said John Gamel, director of gasoline research for MasterCard. “That means more people are driving and they should be buying more gas.”
Instead, about 70% of the nation’s major gas-station chains say sales have fallen, according to a March survey by the Oil Price Information Service. More than half reported a drop of 3% or more — sharpest since the summer of 2008, when gas soared past $4 a gallon.
This year, gas prices shot up as unrest in North Africa and the Middle East rattled energy markets and increased global demand for crude oil squeezed supplies.
Now, only Wyoming has an average gasoline price lower than $3.50 a gallon. Gas is already 41 cents more expensive than at this point in 2008, when it peaked at $4.11 in July.
Most analysts are sticking to forecasts of a high of $4 a gallon, though some have predicted $5 gas.
Across the country, some drivers are hunting for cheaper gas with the help of a mobile phone app. Others are reconsidering mass transportation, or trading in their SUVs for a more fuel-efficient vehicles.
Kim Cramer, who works for Radio Flyer in Chicago, has started walking and carpooling. She’s also learned to be choosy, buying gas in suburbs, where she’s learned she can save as much as 20 cents a gallon.
“I try to fill up anywhere besides the city,” she said.
About two-and-a-half days’ worth of Whitney Shaw’s pay each month goes to fill up her 2001 Hyundai Accent. The administrative assistant is thinking about taking the bus for her daily commute, 50 miles each way between Branford, Conn., and Hartford.
“It’s three hours of pay from work just to fill up my tank even once, so I’m definitely feeling it,” Shaw said while filling up for $3.61 a gallon at a Valero station on the Berlin Turnpike.
Some Americans also are turning to smaller, more fuel-efficient cars. Sales of Hyundai Sonata and Elantra soared 55% in March, while sales of Chevy’s Suburban SUV dropped nearly 24%.
MasterCard’s report shows drivers bought 2.7 billion gallons of gas last week, down 3.6% from the same period in 2010, when it was 80 cents a gallon cheaper.
The decline is somewhat puzzling because Americans typically curb their driving only as a last resort, after sacrificing other forms of discretionary spending, like shopping for clothes, or going to movies, concerts and restaurants.
But demand for gas is falling while other types of spending are on the rise. Retail sales rose 2% in March compared with a year earlier, surprising economists who were expecting no increase or even a decline.
Gamel said it’s too early to tell whether this is the kind of long-term decline in gasoline demand that the economy endured during the recession. Prices already are in the range where Americans started to leave their cars parked several years ago. Drivers began to cut back on gas in October 2007, when the national average approached $3 per gallon.
Even if demand for gas keeps falling in the U.S., it probably won’t be enough to force the price down. That’s because worldwide demand for crude oil keeps rising.
Global demand for oil is about 87 million barrels a day, matching its peak, in 2007. It is expected to grow to more than 88 million barrels a day by year end, with most of the increase coming from China. At the same time, supply is shrinking because of uprisings in Libya and elsewhere in the Middle East.
In the United States, people are watching their local gas stations a little more carefully. Some are even getting rid of their old gas-guzzler.
Andrea Meyer of Manteno, Ill., has done both. She buys gas in the middle of the week because prices seem to jump over the weekend. And she recently sold her 2005 Chevy Envoy SUV and bought a 2011 Chevy Cruze, which gets 30 miles per gallon. She still spent about $200 on gas for the new car from mid-February to mid-March.
“I won’t go hungry tomorrow,” she says. “It’s just taking away from me getting ahead faster. It throws off everything. It immediately makes you reprioritize.”
http://www.usatoday.com/money/industries/energy/2011-04-11-gasoline-sales-drop.htm