July 6, 2001
Gasoline Prices Plummet As Industry Use Weakens
interactive.wsj.com
By THADDEUS HERRICK and CHERYL SMITH
Staff Reporters of THE WALL STREET JOURNAL
But drivers aren't parking their SUVs -- at least not yet. The American Automobile Association estimates 31.8 million Americans drove at least 50 miles over July Fourth, up from 31.5 million last year, despite the inconvenience of a midweek holiday.
Instead of consumers, energy analysts say the unexpected weakness in fuel demand is coming from commerce. Industry accounts for about one-third of gasoline use, and shippers are seeing their businesses chill. "If we're not producing goods, we can't be carrying them over the road." says Larry Goldstein, president of the Petroleum Industry Research Foundation. Demand is also down for diesel -- which fuels most long-haul trucks -- and jet fuel. Trucker Roadway Corp. of Akron, Ohio, said earlier this week that its total tonnage declined 13.3% from a year ago in the fiscal second quarter ended June 16, contributing to a 59% drop in profit.
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Still, the Energy Department's Energy Information Agency is expecting demand for 2001 to increase 1% to 1.5% from 2000. It also sees prices sliding another five cents to 10 cents a gallon as refiners and middlemen try to work off inventory. Wholesale prices have fallen sharply, and retail prices, which always lag behind, haven't caught up. |
