|An average retail price of $3.00 per gallon seems to be a price threshold, according to the EIA.|
US demand for gasoline the week ending April 6 averaged 9.472 million barrels per day, a record for the month of April, surpassing the previous weekly record for April (9.338 million barrels per day for the week ending April 9, 2004) by 1.4%.
Data for the week ending March 30 was also a record for March, according to the Energy Information Administration (EIA). Demand for the four weeks ending April 6 averaged 9.363 million barrels per day, or 2.5% higher than the same period last year.
With the sharp increase in ethanol blending over the past year, gasoline demand measured in terms of energy content has not grown as fast as the volumetric measure of demand growth cited above, since ethanol has a lower energy content per unit volume than the fuel components it has displaced. But, even taking account of the change in fuel composition, recent data suggest that gasoline demand, however measured, is quite inelastic, meaning that it takes a large increase in prices to significantly affect demand.—EIA “This Week in Petroleum”
The average retail price for gasoline in the US climbed back up to $2.80 per gallon last week, according to the EIA data.
The last two times the US average retail price for regular gasoline approached and surpassed $3 per gallon (following Hurricane Katrina in 2005 and most of the summer in 2006), gasoline demand growth did slow. The EIA noted that there have been other times that gasoline demand growth has slowed, however.