It looks like the demand destruction has begun in the U.S. gasoline market despite the 2% payroll tax which gave every worker an immediate raise on Jan 1. This is also a bit concerning from the aspect we are in tax season, and in a note I read two weeks ago, Americans are expected to get back $300B - which in and of itself is a massive stimulus. Hence, if there is anytime these higher prices can be shouldered it is now ... yet Mastercard is reporting the 5th consecutive week of lower gasoline sales.
- With the price of gas averaging $3.77 a gallon Monday, there are signs that Americans are cutting back on driving, reversing a steady increase in demand for fuel. Gasoline sales have fallen for five weeks, first time that has happened since November, according to MasterCard SpendingPulse, which tracks spending at 140,000 service stations nationwide. Before the decline, demand had increased for two months.
- “More people are going to work,” said John Gamel, director of gasoline research for MasterCard. “That means more people are driving and they should be buying more gas.” Instead, about 70% of the nation’s major gas-station chains say sales have fallen, according to a March survey by the Oil Price Information Service. More than half reported a drop of 3% or more — sharpest since the summer of 2008, when gas soared past $4 a gallon. Gas is already 41 cents more expensive than at this point in 2008, when it peaked at $4.11 in July.
- MasterCard’s report shows drivers bought 2.7 billion gallons of gas last week, down 3.6% from the same period in 2010, when it was 80 cents a gallon cheaper.