Oil Prices and Vehicle Miles

[ALS]

Although vehicle miles driven are noisy month to month, it appear that miles driven responds to spikes in oil prices.

Calculatedrisk - CALCULATEDRISKBLOG - March 22, 2010

In early 2008 there was sharp drop in U.S. vehicle miles driven and that was one of the key signs of demand destruction for oil that led me to predict oil prices would decline sharply in the 2nd half of 2008.

First a look at oil prices ...

This graph shows the daily Cushing, OK WTI Spot Price FOB from the Energy Information Administration (EIA).

With oil prices hoovering around $80 per barrel, I've started looking for possible signs of demand destruction again (see: Oil Prices Push Above $81 per Barrel). Of course there are other factors - like China - but vehicle miles is something to watch in the U.S.

The second graph shows monthly oil prices and vehicle miles (month over the same month of the previous year with a 3 month centered average).

Although vehicle miles driven are noisy month to month, it appear that miles driven responds to spikes in oil prices.

For December 2009 - the last month of data - the DOT reported that miles driven were unchanged compared to December 2008 after increasing in 5 of the 6 pervious months. This slow down in miles driven could be because of the sluggish recovery, or it could be because oil prices are starting to impact miles driven.... [Read More]

[Butterfly Mage]

One of the things I started doing as a result of the oil crunch of 2008 was walking to the store and to the post office instead of driving. It's good exercise too.

[xcel]

Hi Al:

___I am considering the excellent find you posted just the other day…

CA state gas usage falls for 4th straight year

___And the graph you incorporated says it all!



___I cannot think of a better explanation for a decrease in miles traveled than the $3.00 + gas prices Californian’s have been privy to for more months than not the past two years.

___Good Luck

___Wayne