This Week In Petroleum |
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Released on April 11, 2007 What Will it Take? As the graph below indicates, the last two times the U.S. average retail price for regular gasoline approached and surpassed $3 per gallon (following Hurricane Katrina in 2005 and most of the summer in 2006), gasoline demand growth (the blue line in the chart below) did slow. Of course, there have been other times that gasoline demand growth has slowed.
The latest weekly data showed demand continuing to grow at a strong clip, with the four weeks ending April 6 averaging 9.363 million barrels per day, or 2.5 percent higher than the same period last year. Demand for the week ending April 6, averaged 9.472 million barrels per day, a record for the month of April, far surpassing the previous weekly record for April (9.338 million barrels per day for the week ending April 9, 2004), while data for the week ending March 30 was also a record for March. With the sharp increase in ethanol blending over the past year, gasoline demand measured in terms of energy content has not grown as fast as the volumetric measure of demand growth cited above, since ethanol has a lower energy content per unit volume than the fuel components it has displaced. But, even taking account of the change in fuel composition, recent data suggest that gasoline demand, however measured, is quite inelastic, meaning that it takes a large increase in prices to significantly affect demand. Gasoline and Diesel Prices Continue to Climb Retail diesel prices also increased this week, rising 5.0 cents to 284.0 cents per gallon. Prices are now 18.6 cents per gallon higher than at this time last year. All regions reported price increases. East Coast prices rose 4.9 cents to 281.3 cents per gallon. In the Midwest, prices were up 5.5 cents to 283.5 cents per gallon, while the Gulf Coast saw an increase of 4.4 cents to 281.0 cents per gallon. The largest increase was in the Rocky Mountains, where prices were up 6.7 cents to 295.1 cents per gallon. Prices on the West Coast saw an increase of 3.6 cents to 292.1 cents per gallon. California prices rose 3.9 cents to 297.8 cents per gallon, 9.7 cents per gallon higher than at this time last year. Propane Inventories Report First Post Winter Build Text from the previous editions of “This Week In Petroleum” is now accessible through a link at the top right-hand corner of this page. |
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