Gasoline demand in a “Goldilocks” scenario
An ag economist is comparing gasoline demand to the Goldilocks fairytale as it goes from one extreme to the other looking for that “just right” spot.
David Widmar with Ag Economic Insights tells Brownfield last year during the height of the pandemic demand was very low and has now picked up to normal pace. But he would not be surprised to see pent up demand for gasoline in the summer months as more people feel safe to travel.
“If we get to 9.5 million barrels per day we are getting back to normal. If we get above 10 million barrels per day, we might be setting new highs.”
He says there was also a whip-lash effect as gas prices nearly doubled in the last year, but current prices are not off trend.
“Over the last 10 years about one third of the weekly observations on gasoline prices have been above $3.00. So $3.00 is higher than we saw a year ago, the highest we have seen in maybe four or five years, but not completely out of the realm of what we have seen in the last decade.”
He says like many other markets, there is a lot of uncertainty as the country reopens and if prices spike to $3.50 or $4.00 a gallon it will weigh on economic growth.