Page 54 - Nigeriaone mag 3 edition en

US consumers spending more on gasoline

Filling the gas tank at the gas station, illustrative image

According to a new study, gasoline spending for the Crude oil inventories remain about 14% below the
average U.S. household has doubled over the past 12 five-year average, and stocks of liquified petroleum
months, up from $2,800 at this time last year. And fuels are still tight, leading to higher pricess of
there does not seem to be any sign of relief in sight. diesel and kerosene at a time when demand for
Some reports indicated that since March of this year truck cargo as well as air travel is also rising.
alone, annual household spending on gasoline has The forthcoming availability of diesel remains a
increased by more than $1,000. concern as supply is still catching up with demand,
Prices continue to rise week after week and are and some expect diesel shortages in parts of the U.S.
breaking records. In California, the average price of this summer.
gasoline rose to $5.30 from $4.309 a year ago. This points to a decline in fuel sales as consumers
"It's not surprising that the consumer sentiment struggle with rising energy prices. Indeed, gasoline
index is so depressed. What is surprising is that sales fell last month while spending on fuel rose
retail sales were so surprisingly strong in April and 37% on an annual basis.
May," Yardeni Research said in a note. There seems to be no relief in sight. Crude oil
In fact, the growth in retail sales over the past two production is up, but that will not be enough to bring
months has surprised more than one, somewhat down prices at the pump. Although there is some
easing fears of an impending recession. However, legislation that is being introduced to Congress to
consumers sentiment has not kept pace with sales as find a way to adjust prices, it appears that the
they are not at all reassured by this overall situation fundamentals are more complex than just local
Some estimates have pointed out that U.S. production and a bill.
consumers are now more pessimistic than they were The global oil supply and demand situation is such
in April, when the index rebounded from a further that nearly all analysts expect prices to remain high
decline. for the foreseeable future, even though the
U.S. inflation, meanwhile, remains at its highest level International Energy Agency has forecast that the
in four decades, in part due to rising energy costs. world will endure the estimated loss of 3 millions
West Texas Intermediate reached parity with Brent bpd of Russian oil later this year thanks due to lower
for the first time in years, with both trading at demand, the blockades, China and high prices.
around $100 a barrel.

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