It’s time to get those big American cars back on the road. The Hummers, the SUVs, the pick-ups… now that gasoline is back down to 2005 levels, who cares about energy conservation?
Gas has hit a national average of $2.02 a gallon, and looks destined to fall below 2 dollars within the coming weeks. Already, residents in more than 20 states are paying less than 2 dollars, with some paying in the $1.50 range.
But it looks like demand isn’t spiking to match the price drop. Though people are paying less at the pump right now, they still aren’t driving as much as they once did. People are scared, out of work, and in foreclosure. There’s no time to go out cruising when you’re sitting at home touching up your resume.
Here’s more, from The Wall Street Journal:
- The price shock began to change Americans’ behavior. Cost-conscious drivers gave up solo commutes to ride buses and trains, made fewer trips to stores and restaurants, and started buying smaller cars.
- But the global economy, roiled by a spreading credit crisis and falling demand for goods and services, has worked to deflate energy prices even faster than they rocketed upward early this year. In July, crude oil settled, at a peak of $145.29 a barrel and retail gasoline peaked at an average of $4.114 a regular gallon. Now, prices are less than half those levels.
- The price for crude-oil futures dropped $4, or 7.5%, to $49.62 a barrel Thursday on the New York Mercantile Exchange, the lowest settlement level since May 23, 2005. Gasoline-futures prices fell to their lowest level in their traded history, shedding 10 cents a gallon to $1.007. And at the pump, the average national gasoline price dropped to $2.02 a regular gallon, according to auto club AAA. In 23 states, gasoline already is selling for less than $2 a gallon, and is down to $1.72 a gallon in Missouri.
- The last time consumers paid less than $2 at the pump was March 2005, when a regular gallon cost an average $1.99, based on AAA data.
- Some government officials and environmentalists are worried the plummeting prices are reversing any energy-conservation gains realized in the past year, when high prices forced Americans to cut back. The economic case for investing in renewable energy, which was looking cheaper, compared with soaring fossil-fuel costs, now is less compelling.
Read the full story here.
