Tuesday, September 07, 2004

Laissez-Faire My Gas Guzzler, Already

From the NYT:
The four-week average for gasoline demand for the week ended Aug. 27 was 9.421 million barrels, essentially unchanged from the period a year ago, according to the Energy Information Administration.

Part of the explanation is because gasoline prices actually declined during the summer, to a national average of about $1.86 a gallon, from a record of $2.05 in May, while frenzied trading in financial markets pushed the price for a barrel of oil to nearly $50 from $40. (The price of crude oil is still far from its inflation-adjusted peak of about $80 reached in 1980.) That is because refineries in the United States produced ample amounts of gasoline in the last three months, meeting demand from consumers even as speculators placed bets on future swings in the price of oil that may have had little to do with actual petroleum supplies.

"I don't think we're going back to $50 without a big supply disruption somewhere," said Juha Laiho, a Houston-based oil trader for Fortum, a Finnish oil company. "It's logical for gasoline to pull back a bit."

It is interesting how many times the issue of supply disruption is coming up these days. Yet, I don't think that an average consumer cares much about the issue just yet.
Seeking out energy-efficient vehicles still seems to be the exception rather than the rule. Sales of recreational vehicles, for instance, climbed 14 percent in the first half of the year from the period in 2003 and rental reservations for the vehicles made in the early summer were up 34 percent from last year, according to the Recreation Vehicle Dealers Association in Fairfax, Va.
...While certain areas of the economy seek to adapt to higher energy costs, such efforts are lost on most drivers. Julie Battistelli, 51, a nurse from Saugus, Mass., said she shunned public transportation, preferring instead to drive a BMW sport-utility vehicle acquired in April that costs about $10 a day in gasoline. "I have to have a car; I have a little girl I have to drive everywhere," Ms. Battistelli said. "In the suburbs you have to drive."

Sometimes it's a necessity, sometimes it's a choice.


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