BASIC LAWS of SUPPLY — PRICE — & DEMAND are at work in this Bloomberg report Jun 16, 2015
Oil supplies are abundant. America’s refiners are running the hardest in 10 years. So why isn’t the country awash in gasoline?
Because driving is way up.
To read the entire article, go to http://bloom.bg/1cZ65Ha
Back in January, the Energy Information Administration forecast Americans would burn 8.71 million barrels of gasoline a day in the first quarter. We actually used 100,000 barrels PER DAY more than that.
Collectively, we Americans drove a record 720.1 billion miles. That’s about 3,900 return trips to the sun.
AAA projections in May suggested the average gasoline prices would range from $2.55 to $2.75 this summer. Looks now to be a bit higher as we approach summer’s first day.
Yet motoring demand is still up. Some of the increased driving comes from commuting to the office after the U.S. added 3.1 million jobs last year. That is the most jobs added since 1999.
While US gasoline prices are still almost a dollar below year-ago levels, we are finding it affordable to take more trips. The market is obviously still sorting all of this out.
For Railways? Will the new price levels result in a market share shift of commuters from train to auto? And from trucks to trains? Probably. But by how much is hard to calculate.