Demand for gas drops on higher prices

By Reuters
Posted March 8 at 1:12 p.m.

U.S retail gasoline demand fell last week as prices roseĀ  in all U.S. regions, MasterCard Advisors’ SpendingPulse report showed Tuesday.

Average gasoline demand fell 1.8 percent, to 8.953 million barrels-per-day, in the week to March 4.

Year-over-year, demand slipped 1 percent.

Retail gasoline prices rose 19 cents last week to $3.43 per gallon, 27 percent higher than a year ago, after crude oil rose to a 29-month high on unrest in the Middle East, the report said.

Prices were flat overnight in the Chicago area, averaging $3.71 for regular unleaded, according to the AAA.

MasterCard expects the slightly improved employment outlook to temper sharp year-over-year declines in demand as more consumers drive to work.

“Historically however, when prices rise toward record territory and as consumers expect higher prices in the near term, drivers begin to cut back on leisure travel and consolidate shopping trips,” said John Gamel, director of economic analysis for MasterCard Advisors’ SpendingPulse in an email.

Over the latest four weeks, U.S. gasoline consumption rose by 1.6 percent year-over-year.

MasterCard Advisors estimates retail gasoline demand based on aggregate sales activity in the MasterCard payments system, coupled with estimates for all other payment forms including cash and checks. MasterCard Advisors is a unit of MasterCard Inc.

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One comment:

  1. jack (me) March 8 at 1:50 pm

    You mean that the economy sort of works, although in a fairly inelastic manner?

    Also, I don’t know where you get those “average gas price” numbers. Sunday to Monday, several gas stations in my area went from 3.75 to 3.95 a gallon. That’s 20 cents overnight.