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Gas Prices Approaching $5 at the same time Demand for Crude Oil at 12-Year Low

April 12, 2011 · · Filed Under Eco-Driving, FuelClinic, LinkedIn, Saving Money, Twitter 

Can anyone explain to me how this system works. We are seeing near-record costs for gasoline at the same time demand for crude oil is at an all-time low.

…”Imports fell 1.7 percent to $210.9 billion. A big reason for the decline was that demand for crude oil fell to a 12-year low, which offset higher prices.”… (Source: Forbes)

The EIA indicates that higher crude oil prices are the cause of the higher gasoline prices, not additional taxes or increases in refining.

Graphic Source: EIA

UPDATED – POLL: What will $5 per gallon gasoline mean to you?

Comments

One Response to “Gas Prices Approaching $5 at the same time Demand for Crude Oil at 12-Year Low”

  1. Alan on April 25th, 2011 7:46 PM

    Simple, really. Most of the driving most people do is frivolous. Higher gas costs = less frivolous driving = lower demand. This can probably keep up until gas costs $7 a gallon or so before a significant percentage of people feel have trouble paying for gas for necessary driving. People in Europe manage to live with $7-10 gallon gas.

    If gas prices go to, say $2, while some people will genuinely see it as a lifesaver, for the most part you’ll see more frivolous driving and more gas guzzlers, basically people indulging in luxuries they’re foresaking now to some extent.

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