Posted in: Gas Prices,
by Patrick DeHaan on Nov 28, 2011 11:35 AM
Lower gasoline prices were nice... while they lasted. Preliminary Black Friday sales results came in today, and they showed that sales were among the highest ever recorded. What do record retail sales mean? People are out spending, and the economy is in decent condition. Unfortunately, that also means that people are out driving to shop, and with the sign that people are spending, it'll likely mean more vacations and more travel in general, which all results in *higher oil demand*.
It's no myth- with a healthy economy, we use more petroleum, thus boosting the price (the U.S. isn't the only country in the world that uses oil, and when our economy is healthy, it helps economies around the world that also start using more petroleum)- bottom line? We could see oil prices begin to move higher.
Last year we also saw excellent Black Friday sales- and you know what happened? Oil prices promptly started rising, pushing gasoline prices at Christmas to their highest ever level. 2010 was the first year that the national average for gasoline was over $3/gal on Christmas, partially because of the high level of spending, which indicated an improving economy.
We could easily set new records on Christmas for gasoline prices- yet again, just a year after setting the current record. Just today, gasoline prices are jumping in the Great Lakes states as gasoline spot prices have bounced higher in recent days. Since last week, gasoline spot prices are up 10-15c/gal, bringing the higher prices. In other areas of the country, there may not yet be increases, but a stop to the drop in prices is likely.
We'll keep following this, but be prepared for higher prices this holiday season!