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The real cost of $120 oil
The timing is unfortunate. Just over a month to go to Memorial Day, with the arrival of the American driving season, and the forecourt price of gasoline is already outstripping the US Energy Information Administration’s expectations.
Published just this week, the EIA’s Spring 2008 report declares:
Looking ahead, expectations for U.S. gasoline supply relative to demand are for a more favorable supply situation in January through May 2008 than was the case in 2007. Demand growth is expected to slow somewhat, while at the same time, refinery capacity availability and imports show signs of improvements. However, crude prices continue to rise, pushing gasoline prices higher.
In fact average forecourt prices have now risen to $3.56, with premium grade gasoline hitting $3.79 and diesel costing $4.14.
That’s about 168 gallons of gas in the tank for those expecting the maximum $600 tax rebate cheque, due to land on American doormats next month.
There is some evidence that high prices are curbing Americans’ tendency to jump behind the wheel, as this graphic from KansasCity.com illustrates. 
The EIA is predicting that gas consumption will fall 0.3 per cent in 2008 - which doesn’t sound very impressive, but for the fact that this would be the first fall seventeen years.
On Wednesday, the price of crude stepped back from the $120 level threatened earlier in the week as dollar rot set in once more and a potential refinery strike in Scotland threatened North Sea production. Crude - both the light American blend and London Brent - have jumped about 20 per cent in April.
Related links:
Fuel Gauge - The Big Picture
Bubbly oil - Free Exchange
Gasoline usage heads down — KansasCity.com
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The new owner is Spanish called Miguel and a mate of mine - if you ask for Ed he will know who I am
Excellent Monkey. I know Ryan’s Bar. V good Guinness. Will call in tomorrow.
wow, phat yanks driving less - we must be on the brink of the end of the world
Look on the bright side. This is good news for cutting CO2 production.
What the hell’s going on with free markets recently? Number 22
Oil prices are up 59% year on year ($72 to $115 or so)
whilst in the USA where there is little duty to pay,
US Gas prices are up just 22% year on year
In fact in the UK, where there is a 50p/litre duty ( 10p VAT)
the price of petrol is ALSO up 22% year on year.
Why has petrol gone up so much in the UK and so little in the USA?
Times must be really tough for the US consumer to stop using their cars. Disney World and the other theme parks are probably getting a bit concerned seeing as you have to drive for miles to get anywhere in large parts of the US.
Paul - saw your note on beers - I am usually found in Ryans bar near St Pauls (Carter Lane). Will be there tmw. But def up for a beer with a fellow Portmuthian. I know the city pretty well so if you have a haunt you prefer … bear in mind though that I am a down to earth kinda guy - places like the Coq D’Argent whilst pleasant enough are a little classy for my tastes!