High gas prices influencing consumer habits

High gas prices influencing consumer habits

June 12 (UPI) — Consumer demand for gasoline might be on the decline as retail gasoline prices in the United States remain stubbornly high, sector analysis finds.

Motor club AAA lists a national average retail price of $2.92 for a gallon of regular unleaded on Tuesday, a fraction of a percent lower than last week, but 58 cents per gallon higher than this time last year. A price of $3 per gallon has been mentioned as the psychological point at which consumer behavior would change.

With the summer travel season in full swing, AAA found the price for gas dropped slightly in most states, but remained high enough to start eating into consumer appetites.

“The higher prices seem to be influencing driving habits,” AAA spokeswoman Jeanette Casselano said in a statement. “While consumer gasoline demand remains strong, it is slowing and not growing.”

Federal data show national levels for consumer gasoline demand dropped below 9 million barrels per day last week, the first time it’s been that low since June 2015.

Demand for gasoline is still relatively high, but slightly below levels from this time last year. Consumer fuel prices, meanwhile, have increased over last year more than any other good.

“Gas prices continue to dip across the country, but remain nearly 50 cents more expensive than last summer in every state,” Casselano said.

By region, the West Coast remains the most expensive market in the country with all states posting an average price above the $3 per gallon mark. Data from the U.S. government show inventories of gasoline dipped slightly, but high enough to indicate the regional price at the pump could stabilize.

The Great Lakes market, meanwhile, is the most volatile. Indiana gas prices fell 13 cents over the week, while Ohio drivers saw retail gasoline prices increased by 2 cents. Gasoline inventory levels are at their lowest level for the year.

Gasoline prices could move lower along with crude oil prices as members of the Organization of Petroleum Exporting Countries indicate they could put more oil on the market in the second half of the year to compensate for chronic production declines from Venezuela, a top oil exporter for the United States, and eventual declines from Iran.