A key reason oil prices have jumped is the falling [image-nocss] dollar.
American gasoline consumers are facing sharply higher pump prices that are due in part to America's deteriorating economy and fears of worsening inflation stemming from government policy. The current retail price discount of $1.299 under the year ago price is not enough to spur our gasoline demand growth. Weakening gasoline demand and higher oil prices (and therefore gasoline prices) are both coming from bad economic conditions.
Multiple interpretative voices are stating that the higher oil prices are coming from optimism about the economy. It they were, then higher gasoline prices would also be coming from economic optimism.
Unfortunately for motorists, more and more of whom are unemployed, it isn't true.
The Summer Driving Season will be muted to a degree, not by fewer driving vacations, although there will be fewer of them, but by the rising unemployment totals. As Lundberg data prove, it's the work commute the keeps demand healthy, not recreational pauses. Current conditions are very difficult for gasoline retailers, with demand for gasoline weakening at a moment when nearly a third of retail markets have negative margins and nearly a third more have margins slimmer than a nickel; of course, poor gasoline demand is hurting retailers that have high margins at the moment, too.
If crude oil's rise is all but finished, and since world oil demand is not ready to support a price hike on its own, then seasonal retail gasoline price increases will probably be small.
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