U.S. gasoline demand is not going down despite record-high gasoline prices, which have been beating previous all-time highs on a daily basis in the past two weeks.
As of May 16, the nationwide average price of a gallon of regular gasoline was $4.483—the highest on record, according to AAA data. That’s up from $4.328 a week ago, $4.077 a month ago, and a massive jump from $3.044 per gallon on the same day in 2021.
Over the past days, U.S. gasoline prices have been setting records day after day. High international crude oil prices, with markets rattled by the Russian invasion of Ukraine and a post-COVID recovery in travel demand, have been pushing U.S. gasoline prices higher this year.
Still, weekly gasoline demand in the United States increased by 3.0% in the past week (Sunday through Saturday) from the prior week and was up 1.8% compared to the four week average, according to data from fuel-savings app GasBuddy shared by its head of petroleum analysis Patrick De Haan.
“Americans clearly aren't being too discouraged by high #gasprices,” De Haan tweeted on Sunday.
The line for exponential demand destruction is if gasoline prices get closer to $6 per gallon, De Haan added.
“Much talked about the line where we see exponential demand destruction. In a normal non-Covid environment, it'd probably be north of $5 per gallon now with inflation, but given the current economy, $5 wouldn't destroy as much demand. I think we'd need to get closer to $6,” he said.
In a note on Monday, De Haan said, “Prices later this week could be closer to $5 per gallon than $4, as demand continues to edge higher and inventories of both gasoline and diesel continue to decline, temperatures warm and motorists get back outside and we near the Memorial Day weekend, the start of the summer driving season.”
“While the increases may start to slow in the days ahead as pump prices catch up to oil, there isn’t much reason to be optimistic that we’ll see a plunge any time soon,” he added.
By Tsvetana Paraskova for Oilprice.com
More Top Reads from Oilprice.com:
- Energy Security Concerns Are Fueling A Renewable Boom
- U.S. Rig Count Continues To Rise As WTI Hits $110
- Six Years Late And 250% Over Budget: Georgia’s Newest Nuclear Plant