Fuel Prices Fall Further, Auto Sales Soar Higher In December
Remember when we thought $2.55 for a gallon of regular was going to make for a good Christmas? Turns out the new average is $2.47, the lowest average price reported in five years.
Also: That’s a photo shot by one of my relatives back in Louisville, Ky., where some stations are pumping gas for as low as $1.96/gallon.
Automotive News reports that by January 1, 2015, gasoline could be selling for as much as $2.25 to $2.40 nationally, a seasonal low not seen since 2008. The current average is down from a peak of $3.69 in April, hitting below $2.50 for the first time since October 2009.
Lower fuel prices — caused by OPEC’s decision to play the short game against United States oil production, and, perhaps, to make Putin tap out — is putting more money into the pockets of consumers, who are, in turn, using the savings to buy new vehicles, including SUVs, CUVs and trucks.
The new-car rush is helping to make this December one to remember, with J.D. Power and LMC Automotive both forecasting a 10.4 percent increase in sales over last December. Both added that 2015 will see 17 million units sold for the first time since 2001, while this year will close at 16.5 million.
As for the oil, West Texas Intermediate is going for $53.60/barrel, while Brent is moving for $58.50/barrel. Both prices are the lowest recorded since May 2009.
Seattle-based writer, blogger, and photographer for many a publication. Born in Louisville. Raised in Kansas. Where I lay my head is home.
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Soaring auto sales, "higher", must be connected with the hyper-bubble of auto loans. Much fatter than the 'low fuel' 6-months hype. Combined with the students' loan bubble that's on the same path, it's going to break previous records. If I'm well informed.
I never see this in the discussion but I have to wonder how much of the vehicle market is not crossing over. The presumption is always that the public is uniform, when Corolla sales go up it's because F-150s and Suburbans are being turned in. The practical reality is that there is some obvious overlap but you could imagine that much of the SUV/PU market is buying when the prices go down because they can logically justify a new purchase. Kind of like how you don't buy steak when you're on a budget but when the bills ease up after christmas you're back out at Ruth Chris or Outback.
Filled up the car, 3.19 for high test. Diesel car still gets 3.60, sadly. Usually the diesel/midgrade price is equal here in the NY area. Lots of stations with 2.95 regular around. Still a .70 cent difference between regular and high grade. I paid 2.85 for home heating oil, and in New Jersey, saw diesel for 3.09....and regular was close to $2 !!!! I was paying 4.50 for high test last year....and 4.20 (no jokes) for diesel. The consumer is so frequently shafted, that I'm happy for this rare break. I'm sure it is not about me and part of someone's much larger play...like breaking Russia...or some such.
"consumers, who are, in turn, using the savings to buy new vehicles" At 15k miles annually, 25 mpg average, that 600 gallons/year. If the consumer is saving $1.50/gallon, that's $900/year. Over a 5-year car payment, that's $4500 more car you can buy. But does anyone really think this trend will last 5 years? Not only that, but low fuel prices will gradually reduce the prices of everything, and this will eventually suppress wages. Wage suppression will happen just when fuel prices take off again, and then we'll see lots of repo cars available on the market. On the other hand, increased economic activity will tend to raise prices on goods, so maybe wages won't slow after all. Type44's philosophy (above) is the way to go.