Drivers aren't deterred by rising gas
Gas prices may be rising steadily, but vacationers are still driven to travel this Memorial Day weekend. Jeremy Hobson reports oil prices won't get much worse, and cost per gallon may actually go down this summer.
Gas prices on display at a Cheveron gas station in South San Francisco, Calif. -- May 18, 2009. U.S. gas prices have surged 25 cents in the past three weeks. (Justin Sullivan/Getty Images)
TEXT OF STORY
Steve Chiotakis: Oil's above $61 a barrel again today. Investors apparently hedging against inflation and a weakening U.S. dollar. And the price of gas is up as well, the national average is at about $2.36 a gallon according to Triple-A. But that's not stopping people from embarking on some Memorial Day journeys. Here's Marketplace's Jeremy Hobson.
Jeremy Hobson: At a gas station in Los Angeles, Erin McColl is filling up at $2.87 a gallon. That high price tag isn't stopping her from going on a fishing trip this weekend.
Erin McColl: It's still better than it used to be, so it still seems like it's cheap enough to travel. Because you know, a few months ago, it was just horrible.
And Ruchir Kadakia says it won't get much worse. He's a global oil market expert at Cambridge Energy Research Associates.
Ruchir Kadakia: More than likely, what the consumer's feeling moving into the summer, these are probably going to be the high prices that they feel throughout the entire summer.
Kadakia says the price of gas has been rising along with the price of a barrel of oil. And oil has been bubbling up as the stock market has rallied. Kadakia says it's all about expectations of a turnaround in the world economy.
Kadakia: Oil prices can move up in sympathy with the equity market, but at some point, the fundamentals tend to catch up.
And Kadakia says right now, the fundamentals are low demand and high supply. He says it's quite possible the price of gas will drop as the summer goes on.
In New York, I'm Jeremy Hobson for Marketplace.
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05/22/2009
My car gets 30 mpg and I can take a bus to work. Gas would have to reach $8 or $10 before it would even begin to deter my discretionary driving.
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