US: cheap gasoline fuels auto sales growth image

With the summer driving season dwindling out the US gasoline prices have now gone down to levels not seen since 2004 and thus reversing the effects of more than a decade of surging prices.

According to a recent report by the U.S. Energy Information Administration, the average retail price for a gallon of gasoline in the country was of only $2.53 per gallon at the start of the week. This is around one dollar per gallon or 30 percent from the same period in 2014 and have not been seen at this mark since the summer driving season ended back in 2004. Traditionally, the gasoline price is variable by season, as it goes up due to increased demand in the summer because it stretches the limited refining capacity. Thus, during the past decade or so the prices have gone down around 50 cents on average between the end of the summer driving season and the end of the year.

If the tradition is respected, the slide could lead to gasoline prices in the $2 per gallon range – once more some of the lowest since 2004. This means auto sales demand has received a major bump since last year as consumers return to larger vehicles and opt for crossovers, SUVs and pickup trucks over passenger cars and green models. The traffic volume is also surging rapidly and the increase spreads across the country and impacts states as diverse as New Hampshire or Florida. Meanwhile, August’s auto sales – devoid of the usual Labor Day sales bonanza – still soared by 2.7 percent – with light truck deliveries up 5.5 percent.

Via Reuters