Thursday, November 27, 2008

Gasoline Declines From Record High

The average price of a gallon of unleaded gasoline has declined over $2.00 during the course of the last 4+ months. As the below chart notes, we are approaching levels seen in September 2001.
  • This decline in gasoline prices represents a savings of over $300 billion in gasoline costs for consumers. This is equivalent to a tax cut of the same amount.
  • U.S. driving mileage is running 89 billion miles per year less now than it was a year ago. The price decline represents only a 1.3% decline in total U.S. oil use.
  • The total decline in U.S. oil use is running roughly 5% according to the EIA. As a result, the difference between the 1.3% and 5% must be a result of less driving by individuals and/or less use by trucking companies.
(click to enlarge)

gasoline price chart as of November 26, 2008Source: Chart of the Day


Less Driving and Lower Gas Prices are Not the Important Factor
Energy Investment Strategies
By: Jim Kingsdale
November 21, 2008

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