First Decline in Summer Gas Consumption Since 1991

[GTAHVIT]

We may finally be getting sick of gas prices.... Maybe.

I'm gonna have to add "once a month" to the end of my signature.:(


Reuters


WASHINGTON (Reuters) - U.S. summer gasoline demand will shrink for the first time since 1991 as skyrocketing pump prices and the wider economic malaise hit holiday plans, the Energy Information Administration forecast on Tuesday.

With some regions seen facing the shock of $4 a gallon gasoline this summer, fuel demand could contract 0.4 percent from 2007 as cars and gas-guzzling SUVs spend more time in driveways and less on highways.

It would be the first decline in summer gasoline use since a recession choked the U.S. economy 17 years ago. Many analysts forecast that this year's housing crisis, credit crunch and high oil prices could cause an economic retraction.

"The economy did have a slight recession in 1991, so that's one similarity between that year and this (year)," said EIA administrator Guy Caruso. "We are projecting a small recession for the first half of the year," he said.

Meanwhile, several U.S. senators urged the Federal Trade Commission to prohibit manipulation in petroleum markets.

"Record energy prices and industry profits are coming at a time when supply and demand suggest that prices should be significantly lower," said Sen. Olympia Snowe, Republican of Maine.

Even though gasoline inventories hit a 15-year high on April 1, the EIA forecast record gasoline prices, citing expensive crude oil. The agency said crude should average $97 a barrel this summer, up $30 from last year.

Gasoline prices will peak in June at an average $3.62 a gallon, the EIA predicted, with an average of $3.54 for April-September, up 61 cents from the previous driving season.

Truckers also will feel the sting at the pumps, with diesel prices to average $3.73 a gallon this summer, up 88 cents from last year, after hitting a monthly peak of $3.91 in April.

CRUDE SUPPORTS

U.S crude shot to a record $111.80 a barrel in March as investors seeking to hedge against inflation rushed into commodities, helping to push retail gasoline prices to an all-time high of $3.33 a gallon this week.

The EIA now forecasts the price of oil -- which accounts for 70 percent the cost of making gasoline -- should average over $100 a barrel for 2008, and $103 in May and June.

Strong oil demand outside the United States should keep crude prices high this year, despite large fuel supplies and tepid demand in the world's top oil consumer, the agency said.

"The combination of rising world oil consumption and low surplus production capacity is putting upward pressure on oil prices," the EIA said.

In absolute terms, the EIA forecast that U.S. summer gasoline demand should slip to 9.404 million barrels per day during the first half of 2008, down 36,000 bpd from last year.

A U.S. economic turnaround in the second half should push annual growth to 1.2 percent for the year, still the lowest rate since 2001, the agency said.

Lower U.S. fuel demand should drag down gasoline imports this summer by 91,000 bpd to 1.074 million bpd against year ago levels, while domestic gasoline production should fall 20,000 bpd to 8.241 million bpd.

[GTAHVIT]

Energy Information Administration (DOE) Short-term Energy and Summer Fuels Outlook April 2008

If you want to know what the DOE predicts for the next few months, this pdf has all the info. Interesting information regarding US oil production. The quote below seemed the most appropriate to discussions held on Camaro5.

The methyl tertiary butyl ether (MTBE) phaseout in 2006, high oil prices, and new mandates requiring the use of renewable fuels, have all encouraged construction of new ethanol production capacity. During 2007, 36 new ethanol plants or plant expansions started production, and in 2008 an additional 64 new facilities are expected to begin production. Domestic ethanol production has increased from an average of 314,000 bbl/d during the summer of 2006, to 418,000 bbl/d during the summer of 2007, and is projected to average 550,000 bbl/d this summer. This summer’s domestic gasoline production is expected to be down by about 20,000 bbl/d from last summer’s average. Because of the expected 130,000 bbl/d increase in ethanol production, production of gasoline at U.S. refineries is expected to decline by as much as 150,000 bbl/d this summer.

At the onset of the peak driving season (April 1), total gasoline stocks, at 224 million barrels, are estimated to be ample. That level is 23 million barrels above last year, 19 million barrels above the 5‐year average, and the highest in 15 years (U.S. Gasoline and Distillate Inventories). Because of the high current inventory level, the average stock draw is projected to be about 88,000 bbl/d, compared with last summer’s 14,000 bbl/d stock draw (and the average of 15,000 bbl/d over the last 15 years).

[TAG UR IT]

Anyone remember that email that went around asking people not to fill up on a certain date of the month? Would doing something like that really hurt gasoline companies?

The reason I ask, is because I see it like this. If you just hold off on refueling on Monday, it's going to happen on Tuesday anyway. The gas stations will still make their money...just a day later or the day before.

Any thoughts?

[GTAHVIT]

I'm with you Tag, I don't think it really hurts much. At best it would show that we are pissed enough to "protest". Maybe they will feel a pinch in coffee, soda, and food sales. But I don't really think it will hurt. And that would only punish American companies. The real problem is OPEC. So, I say it's counter productive to the real problem.

[Mindz]

This morning at 2:30am PST, crude oil was $117.61 a barrel.

[50SBLOW]

Drill ANWAR now!!!! And the Dakotas and the Gulf coast. I no it is not a permenant solution but would provide relief until another fuel or more efficient engines are developed.

[stovt001]

You can't protest by boycott unless you plan on just buying no gas, at all. Not buying on a certain day just means you'll buy more the next. Not buying from a certain station is even dumber. Gas is fungible so if you boycott Exxon Mobile, they'll just sell to BP. In the end everyone gets the same money. All you'll do is hurt the poor guys running the station. Gas prices are the fault of the dollar destroying policies we've embraced, and speculators not learning their lesson from the housing bubble. It has precious little to do with the gas companies. The cost of oil has risen much more than the price of gas.

[bouncertime]

Looks like it is finally time for me to sell my Blazer, $60 a week in gas is killing me.

[stovt001]

I'm thankful my Cobalt has been getting better than advertised mileage. Even with AFM, DI, VVT, etc, I won't be able to get the Camaro until I move much closer to work.

[bouncertime]

I love my Cobalt, but the wife uses it for work. I would love to find a Supercharged Cobalt for around $10K, but I don't see that happening.

[DGthe3]

Originally Posted by TAG UR IT

Anyone remember that email that went around asking people not to fill up on a certain date of the month? Would doing something like that really hurt gasoline companies?

The reason I ask, is because I see it like this. If you just hold off on refueling on Monday, it's going to happen on Tuesday anyway. The gas stations will still make their money...just a day later or the day before.

Any thoughts?

If they see that demand is down monday, they will drop the price latter in the day to draw more people in. Then jack the price up on tuesday when everyone else has to fill.