U.S. Gasoline Demand to Grow Most Since 70s, Says Raymond JamesMoming Zhou
U.S. gasoline demand may grow this year by the most since the 1970s as falling prices boost consumption, Raymond James said.
Demand may increase 300,000 barrels a day from 2014, or about 3 percent, analysts including Houston-based J. Marshall Adkins said in a report today. The U.S. used 8.94 million barrels a day of the motor fuel last year, according to the Energy Information Administration.
Crude prices have plunged more than 50 percent from June’s peak as rising production and weaker demand created a global glut. Regular gasoline at the pump dropped to the lowest level since April 2009, according to AAA.
“While the oil price plunge is clearly painful for the energy industry, consumers stand to gain significantly in 2015 due to the related fall in gasoline prices,” Raymond James said in the report. “This gasoline price correction will lead to the biggest surge in gasoline demand that the U.S. has seen in over three decades.”
West Texas Intermediate crude dropped 4 percent to $46.76 a barrel on the New York Mercantile Exchange. The U.S. benchmark has fallen 12 percent this year, following a drop of 46 percent last year. Regular gasoline averaged $2.054 a barrel on Jan. 19, down 44 percent from last year’s high of $3.696 on April 26.
Pump prices may average $2.52 a gallon this year, according to Raymond James.