Gasoline Demand Shows Signs of Weakness

U.S. motorists will spend an estimated $20.5 billion more on gasoline over the next six months than they did the same time last year, the government says, because of higher prices and increased demand. But they’re not happy about the trend, and may just drive less.

“That’s it? That’s it for $20 bucks?” said Laurie Payne of Plano, Texas, as she topped off the tank of her Land Rover with $2.85-a-gallon regular unleaded and swore the day she trades it in is getting closer.

Some analysts say growth in gasoline consumption, which has been below historical norms since the start of the year, could stall out entirely by summer if forecasts of rising pump prices are correct. While this might crimp consumer spending, which accounts for two-thirds of total economic growth, analysts said the impact should be minimal.

“We’re not at gas prices that pose some kind of a tipping point,” said Citigroup Smith Barney senior economist Steven Wieting. He added: “There have been botched forecasts of a recession at every $10 move (higher) in crude oil futures,” which are just above $69 a barrel.

AP