Americans are driving less, with the holidays behind them and gasoline at two-year highs.
Gas costs around $3.10 a gallon, the highest price since mid-October 2008. Americans usually drive less in the winter, and recent bad weather across the country was further incentive to stay home. And money needs to go towards paying off holiday credit card bills.
Analysts are closely watching economic news and consumer sentiment to determine how much high gas prices are influencing consumer habits. That could affect the pace of the economy in the months ahead.
Drivers are "pulling back on gas right now but you can't tell whether it's weather-related," said Tom Kloza, publisher and chief oil analyst at Oil Price Information Service. "Unless you're in Boca Raton, Fla., or San Diego, you're seeing pretty sleepy midwinter demand."
According to research firm MasterCard Advisors SpendingPulse, gasoline demand for the week ended Jan. 7 was 8.39 million barrels a day, a level not seen since Sept. 30, 2005. Demand fell 2.9 percent from a year ago.
Consumer prices rose last month by the largest amount since June 2009. Gasoline prices accounted for about 80 percent of the increase, the Labor Department said Friday. The gasoline index jumped 8.5 percent in December. Gas prices rose from about $2.86 a gallon on Dec. 1 to $.3.07 at year's end.
The price continues to rise, although at a slower pace. The national average for unleaded regular gasoline was $3.095 a gallon Friday, according to Wright Express, AAA and the Oil Price Information Service. That's up nearly 34 cents from a year ago.
Gasoline demand and prices typically fall in January and February. But the price of oil continues to hover around $91, about where it started 2011 and near a two-year high. That could temper any price break at the pump.
"The typical mid-winter break that we get on price will be measured in pennies as opposed to nickels and dimes," Kloza said.
The analyst also believes that the usual run-up in price ahead of the summer driving season could start early this year because expectations for further improvement in the economy could cause investors to push the price of oil towards $100 a barrel.
On Friday, oil prices dipped after the central bank in China raised the amount of money banks must keep on reserve, its latest effort to curb inflation and rein in growth.
Benchmark oil for February delivery rose 14 cents to $91.54 a barrel on the New York Mercantile Exchange.
In other Nymex trading in February contracts, heating oil rose 3.61 cents to $2.6452 a gallon, gasoline futures gained 4.87 cents to $2.4946 per gallon and natural gas futures added 7.3 cents to $4.48 per 1,000 cubic feet.
Brent crude gained 62 cents to $98.65 a barrel on the ICE Futures exchange in London.
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