The new WSJ Numbers Guy Phil Izzo (Carl Bialik has moved on):
The number of people hitting the road for Memorial Day this year continues to edge up, as gas prices remain stable for the third year in a row. Why don’t travelers have to worry about pain at the pump this year?
The national average retail price for gas leading up to the holiday was $3.67, little changed from last year at this time and lower than the prior two years. Gas prices can be volatile, but the past few years have been in a relatively steady range.
- There are a multitude of reasons that gas prices haven’t gone haywire. For one, economic growth has been steady but unspectacular. A deep recession such as the one that began in 2007 will send prices plunging and strong growth means greater demand and higher prices. The best predictor of gas prices is the cost of oil, and though there have been global hotspots over the past few years, there haven’t been many major supply disruptions.
- Crude isn’t the only factor in gas prices, of course. Another important input is the refining process. This month more oil moved smoothly through the process in the U.S. than last year, keeping prices lower even as crude prices tick up.
But there’s another long-term trend helping to keep a lid on prices in the U.S. Demand and consumption by cars has been flat or falling. More fuel efficient cars are lowering the amount of energy consumed, according to the U.S. Energy Information Administration. And at the same time, Americans are driving less for a range of reasons, including an older population and lower economic growth and employment.
via blogs.wsj.com
We drove all the way to Price Lake for some car camping. A travel cost model would predict that we'd visit there a lot more often than we do.
