NEW YORK (Reuters) - This week, U.S. economic indicators have hammered home a bullish point for global oil markets: the resurgence in American gasoline demand is here to stay.
On Friday, data showed that U.S. unemployment fell more than expected to just 5.1 percent in August, the lowest since April 2008 - when U.S. crude was trading at over $100 a barrel. More workers mean more commuters burning more gasoline.
Days earlier, U.S. August car sales registered their highest annualized rate since 2005, according to Autodata Corp. And consumers are not buying just anything: truck sales surged by 8.6 percent versus a year ago while passenger car sales fell, reflecting the sharp swing this year toward gas-guzzling models.
The new SUVs are not sitting in the garage. In June, the last month for which data is available, Americans drove more miles than any month in history.
Data this week confirmed gasoline use rose 4 percent in June from a year ago.
Behind many of these trends are gasoline prices that are at their lowest for this time of year since 2004, according to an Energy Information Administration report published just before the coming three-day Labor Day weekend.
At an average of $2.51 a gallon last week, they are nearly $1 lower than a year ago. They may be headed lower still, as the EIA is forecasting an average $2.11 during the fourth quarter.
“It’s really clear that low prices are boosting consumption,” said energy economist Philip Verleger. On a 12-month moving average, demand is now growing at 2.3 percent, the fastest rate since at least 2000.
“And it’s not so much more driving, it’s which car you take.”
Light trucks accounted for 55 percent of all U.S. light vehicle sales through August and are on track to finish at the highest share since 2005, according to WardsAuto data. An Edmunds.com study earlier this year found that a record high 22 percent of consumers who were trading in hybrids or electric vehicles went on to buy a new SUV instead.
All told, they add up to signs that the recent resurgence in U.S. demand for gasoline - which is equivalent to China’s total consumption of all forms of fuel - may maintain a surprisingly brisk pace for some time to come.
Verleger offers one cautionary note, however: Should gasoline prices suddenly rise consumers may be quicker than before to slam on the brakes. When refinery issues caused California pump prices to surge in May, demand slowed sharply.
“When gasoline prices go back up, consumers that have alternatives are going to jump on them,” he said.
Reporting by Jonathan Leff, additional reporting by Joe White in Detroit; Editing by Lisa Shumaker