Sunday, June 26, 2011

Falling Gasoline Prices

by Bill McBride on 6/26/2011 09:14:00 AM

Earlier:
Summary for Week Ending June 24th
Unofficial Problem Bank list at 1,001 Institutions and Transition Matrix
Schedule for Week of June 26th

Oil prices are down sharply this month - and the announcement last week by the International Energy Agency (IEA) of the release of 60 million barrels of oil from emergency stockpiles (30 million U.S.) pushed oil prices down further.

Brent crude futures fell to $105 per barrel and WTI futures are down to $91 per barrel.

And gasoline prices are still falling. According to GasBuddy.com, prices are now down almost 40 cents per gallon nationally from the recent peak in early May. And it looks like gasoline prices will probably fall some more over the next few weeks ...


Orange County Historical Gas Price Charts Provided by GasBuddy.com

The sharp increase in oil prices in March appeared to impact consumer spending and sentiment. Consumer sentiment, as measured by Reuters / University of Michigan, fell sharply in March to 67.5 from 77.5 in February (and has only recovered slightly to 71.8 in early June).

Personal Consumption Expenditure (PCE) growth also slowed in March. Tomorrow the BEA will release the income and outlay report for May (it will be ugly), but falling gasoline prices should help some in June and July. On Friday, Reuters / University of Michigan will release the final sentiment report for June (might show a slight increase), and falling prices will probably boost sentiment in July.