Tag Archives: gas prices

How Gasoline Prices Affect Consumer Purchases

From today’s WSJ:   A dollar is a dollar. So if rising prices cut into our purchasing power, textbook economics suggests that we’d carefully weigh all our buying decisions to determine where to cut back, and by how much. Of course that’s not really the way most people budget. Rather, we put different items in different budget baskets – here’s one for movies, here’s one for clothing, here’s one for gassing up the car. So if clothing prices go up, we’ll cut back on clothing purchases first before cutting… Read More →

New Age of Natural Gas

The Energy Information Administration released new data yesterday showing that natural gas production in the U.S. reached an all-time historical monthly high in March of 2.313 trillion cubic feet, breaking the previous record of 2.28 trillion cubic feet set in March of last year by almost 33 billion cubic feet (see graph). As Mark Perry has reported previously, the U.S. is now the world’s largest producer of natural gas, having surpassed Russia’s production last year to become the new “Saudi Arabia of natural gas.”  It’s all because of a breakthrough in drilling technology, involving the use of… Read More →

90-year supply of natural gas at current consumption rate

From MIT Technology Review (click here): Experts now believe that the country has far more natural gas at its disposal than anyone thought three or four years ago. The revised estimates are largely due to advanced drilling techniques that make it economically feasible to extract the fuel from shale. And while the Marcellus is the most recently discovered and possibly the largest shale-gas deposit (covers PA, NY, VA and OH), others are scattered throughout the country. The U.S. consumes about 23 trillion cubic feet (TCF) of natural gas… Read More →

Latest energy outlook report released

According to the early release of the Energy Information Administration’s (EIA) Annual Energy Outlook 2009 (AEO2009), the latest projections expect virtually no growth in U.S. oil consumption for the first time in more than 20 years. EIA said that the combination of recently enacted CAFE standards, requirements for increased use of renewable fuels, and an assumed rebound in oil prices as the world economy recovers will reduce oil consumption. U.S. net dependence on imported liquids will decline dramatically over the next 20 years as the use of biofuels… Read More →

Gas Price Update

National Average: $1.89 (lowest price since February 2005)National Low: $1.35 in Kansas City Mark Perry estimates the annualized savings to be $317.4 billion, based on the drop in gas prices from the peak of $4.12 per gallon in July to the current $1.89 ($1.4235 billion annual savings for American consumers and businesses per penny decrease in gas prices, see calculations here).

Falling gas prices act almost like a tax cut

According to the most recent data from the Federal Highway Administration, the total traffic volume over the most recent 12-month period (through July 2008) was 2.944 trillion miles. According to data from the EIA, the average fuel efficiency for all vehicles in 2006 (most recent year reported) was 17.2 miles per gallon. That means that the amount of gasoline required for the traffic volume over the most recent 12-month period was 171,216,860,465 gallons (2.944 trillion miles driven divided by 17.2 miles per gallon). Therefore, every penny decrease in… Read More →

Gas prices fall below $3.00 in Midwest

Lowest reported gas prices today in: Texas: $2.68; Oklahoma: $2.80; Missouri: $2.79; Kansas: $2.87; Iowa: $2.87; and Minnesota: $2.94.

Fuel costs continue to influence driving behavior

The Federal Highway Administration reported that travel during June 2008 on all roads and streets in the nation fell by -4.7% compared to June last year. June marks the eighth consecutive month of traffic volume decline compared to the same month in the previous year. Travel YTD through June in 2008 fell by -2.8% compared to 2007. Now that gas prices started falling in July and August, will consumers continue to reduce driving, or will they revert back to their old driving patterns? We’ll know in about a… Read More →

Gas falls below $3.50 in Kansas

Dorothy is probably happy since gas prices fell below $3.50 in Topeka today. In my May 31 post, I referred to the EIA’s (Energy Information Agency) projection that gas prices could fall below $3.50 by the end of the year. Friends scoffed at the notion. Hmmm… Now to see what impact the backed-up traffic jam on the Mississippi River is going to have.

Better benchmark for gas prices

Warren Meyer added a twist to Mark Perry’s analysis of what 1,000 gallons of gas costs as a percent of per-capita disposable income (click on graph for larger image). The key for households, Warren maintains, is not how much it costs to buy 1000 gallons, but how much it costs to buy the gas required to drive their typical annual miles. Using 15,000 as an average driving miles per year per person, he gets the result above. So, while I too think paying $4 for gas is not… Read More →