Lost in the Shuffle
As quickly as energy prices shot up earlier this year, they appear to be collapsing just as quickly. However, concerns over the financial and credit market crisis have largely overshadowed this. Falling prices generally bolster demand for a product, but concerns over the economy are keeping consumers off the roads. In addition, consumers may have changed their behavior directly as a result of this summer's price spike as well as the belief that the recent decline in prices is only temporary. An article (subscription required) in today's Wall Street Journal illustrates the degree to which consumer spending on gasoline has collapsed-pay particular attention to the chart shown in the article. According to data from the Energy Information Administration, gasoline demand has declined in 11 of the last 12 months. This marks the sharpest and most protracted contraction since the 1979 to 81 period.
10-10-2008 3:55 PM