November 4, 2008 / 7:04 PM / 11 years ago

U.S. gasoline demand up as prices fall: MasterCard

NEW YORK (Reuters) - U.S. retail gasoline demand edged up 1.3 percent last week from the previous week as national average prices for the fuel dropped, MasterCard Advisors said on Tuesday.

A New York City cab driver fills his taxi up with gas at a Hess station in New York July 2, 2008. REUTERS/Shannon Stapleton

But gasoline demand remained 3.9 percent below year-ago levels, said Michael McNamara, vice president of research and analysis at MasterCard Advisors, citing the economic slowdown.

American motorists pumped an average of 9.015 million barrels per day in the week ended October 31, up 1.3 percent from the previous week, MasterCard said in its weekly SpendingPulse report.

The four-week moving average for gasoline demand was 8.915 million barrels per day, down 6.6 percent from a year ago.

“The economic turbulence is obviously still there, but we’re seeing some relief from the price pressure point,” McNamara said.

“We are starting to shake out the demand destruction that is more explicitly tied to the economic environment.”

National average prices slid 26 cents from a week ago to $2.56 per gallon, the lowest level since March 2007.

“This is the first week in over a year that we’ve seen (gasoline prices in) every region of the country below $3 per gallon,” McNamara said.

A Reuters poll showed energy analysts believe that the Energy Information Administration will report a draw in U.S. gasoline inventories for the first time in three weeks.

MasterCard Advisors, a unit of MasterCard Inc (MA.N), estimates retail gasoline demand based on aggregate sales activity in the MasterCard payments system coupled with estimates for all other payment forms.

Reporting by Rebekah Kebede; Editing by David Gregorio

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