Gas prices are rising at a time of year when they normally fall. A Wall Street Journalstory says the rising gas prices should not curb the recovery unless the national average gas prices passes the $3 mark.
The upcoming U.S. holiday shopping season, typically a period of high consumer spending, will be eyed as a measure of economic recovery. Holiday travel and more shopping outings may boost oil consumption over the season, but more expensive fuel could curb these trips.
"A hike in discretionary driving associated with holiday shopping trips will exert more demand pressure, although if pump prices move above $3, it will not only kill discretionary driving but holiday shopping too," said Mike Fitzpatrick of MF Global in New York.
But fundamentally, there is much to restrain prices. Fuel supplies are brimming and that could make it harder for refiners to raise retail gasoline prices, delaying the impact of higher oil prices on consumers.
There should be enough downward pressure on oil prices to keep gas prices below the $3 mark. That will all change when the summer driving season kicks in again and we could be looking once at again at $3 gas. This will put an extra burden on consumers and reduce spending. The $3 mark may also be overly optimistic. For customers that are already hurt by lost or reduced wages every extra cent that has to go towards gas can be painful. The cost really adds up quickly for commuters.
