xcel
07-13-2006, 06:56 AM
Pump sales still up despite price threshold. (http://www.detroitnews.com/apps/pbcs.dll/article?AID=/20060713/METRO05/607130338/1148/AUTO01)
Brad Foss - Associated Press - July 13, 2006
http://www.cleanmpg.com/photos/data/501/Gas_Prices_Up.jpg
Justin Sullivan - Getty Images
Since prices at the pump first soared to $3 a gallon in September, motorists have now grown used to expensive gas.
WASHINGTON - High gasoline prices may dent economic growth, but consumers' fuel appetite is still strong.
Those trends are likely to persist, experts said, as average nationwide pump prices approach $3 a gallon - a threshold once feared to be disastrous for motorists and potentially the economy.
Citigroup Smith Barney senior economist Steven Wieting said the conventional wisdom that $3-a-gallon was some kind of tipping point "has been largely overstated."
Sonja Hubbard, chief executive of E-Z Mart Stores Inc., which owns 319 gasoline stations across Arkansas, Louisiana, Oklahoma and Texas, said, much to her surprise, gasoline sales continue to rise. But she noted negative consequences, too: sales of food and drinks, which often make up more than half of a gasoline retailer's profits, have stalled out since May.
The Energy Department released data on Wednesday that showed an average of 9.6 million barrels a day of gasoline being supplied to the market over the past four weeks, a period of weak sales for the world's largest automakers and retailers. That is 1.7 percent more gasoline consumed than during the same period a year ago.
While gasoline demand is not expected to collapse, oil analysts caution that weakening economic growth could temper soaring energy prices over time.
"It's kind of a slower, more lagging impact," said Antoine Halff, director of global energy at Fimat USA in New York.
Economists say neither gasoline demand nor the economy have cratered in the face of soaring fuel prices because energy costs are only a small percentage of the average U.S. household budget. Consumers have been helped by relatively low interest rates and low core inflation. The notion that $3 a gallon is a psychologically significant level that causes motorists to cut back on their driving gained currency last summer after hurricanes that slammed the Gulf Coast knocked out refineries and sent gas prices soaring to a record average of $3.07 in early September. A decline in gasoline consumption soon followed.
This time, the advance toward $3 has been more gradual and so consumers have had time to adjust their mindsets and budgets, analysts said.
Wachovia Corp. economist Jason Schenker said motorists cannot instantly change their lifestyles - the type of vehicle they drive, the distance they drive to work - and so "consumption is essentially fixed."
Brad Foss - Associated Press - July 13, 2006
http://www.cleanmpg.com/photos/data/501/Gas_Prices_Up.jpg
Justin Sullivan - Getty Images
Since prices at the pump first soared to $3 a gallon in September, motorists have now grown used to expensive gas.
WASHINGTON - High gasoline prices may dent economic growth, but consumers' fuel appetite is still strong.
Those trends are likely to persist, experts said, as average nationwide pump prices approach $3 a gallon - a threshold once feared to be disastrous for motorists and potentially the economy.
Citigroup Smith Barney senior economist Steven Wieting said the conventional wisdom that $3-a-gallon was some kind of tipping point "has been largely overstated."
Sonja Hubbard, chief executive of E-Z Mart Stores Inc., which owns 319 gasoline stations across Arkansas, Louisiana, Oklahoma and Texas, said, much to her surprise, gasoline sales continue to rise. But she noted negative consequences, too: sales of food and drinks, which often make up more than half of a gasoline retailer's profits, have stalled out since May.
The Energy Department released data on Wednesday that showed an average of 9.6 million barrels a day of gasoline being supplied to the market over the past four weeks, a period of weak sales for the world's largest automakers and retailers. That is 1.7 percent more gasoline consumed than during the same period a year ago.
While gasoline demand is not expected to collapse, oil analysts caution that weakening economic growth could temper soaring energy prices over time.
"It's kind of a slower, more lagging impact," said Antoine Halff, director of global energy at Fimat USA in New York.
Economists say neither gasoline demand nor the economy have cratered in the face of soaring fuel prices because energy costs are only a small percentage of the average U.S. household budget. Consumers have been helped by relatively low interest rates and low core inflation. The notion that $3 a gallon is a psychologically significant level that causes motorists to cut back on their driving gained currency last summer after hurricanes that slammed the Gulf Coast knocked out refineries and sent gas prices soaring to a record average of $3.07 in early September. A decline in gasoline consumption soon followed.
This time, the advance toward $3 has been more gradual and so consumers have had time to adjust their mindsets and budgets, analysts said.
Wachovia Corp. economist Jason Schenker said motorists cannot instantly change their lifestyles - the type of vehicle they drive, the distance they drive to work - and so "consumption is essentially fixed."