I made an aside near the end of Driving update for June 2017: Dez.
Looks like my wife and I are contributing to the trend of increased driving. That might increase more, as oil and gas prices are down year over year, but that's a story for another entry.The story begins with oil, which CNBC told earlier this week in Crude Oil Just Logged A Huge Losing Streak.
Max Wolff, 55 Institutional, and Phillip Streible, RJO Futures, discusses the energy space with Courtney Reagan.Oil-Price.Net shows today's close for WTI at $44.74, up more than a dollar from the $43.03 of three days ago, but it's still down year-over-year as well as down ~13.5% since the beginning of the year. That will result in lower gas prices, even with summer driving season in full swing. CNN Money reported on that last week in Summer gas prices dip to 12-year low.
The drop in the cost of oil has been a happy surprise for drivers, who are enjoying the cheapest gas prices at the start of summer in 12 years.Twelve years ago was 2005, the year that conventional oil production began to peak. All of the unconventional oil that has been brought to market during the past few years is responsible for this price drop, a phenomenon I reported in Supply and demand still work for oil.
The result of the lowest summer gas prices since conventional oil peaked is expected to be more holiday travel, as Wochit News reported in July 4th To Have Record Number Of Drivers On The Road.
The number of Americans traveling by car for the Fourth of July holiday will hit a record high this year, fueled by a growing economy and relatively low gasoline prices, the nation's largest motorists' advocacy group said on Thursday. The forecast for strong driving numbers will be welcomed by U.S. refiners, which are banking on summer driving season to draw down high product inventories and resurrect margins from seasonal lows. The average U.S. price for regular gasoline was $2.28 per gallon on Wednesday, down slightly from $2.32 a year ago, according to AAA.GasBuddy lists the U.S. average at $2.25 and the Detroit average at $2.34, both of which are down year-over-year.
Speaking of Supply and demand still work for oil, I am no longer confident in my long-standing prediction that the U.S. will head into recession by the end of this year. The lower gas prices, continuing low unemployment rate, and near-record-high stock indices all suggest that the U.S. economy is not headed for recession in the next six months. I'm delaying my prediction by one Friedman Unit, which is six months, so the deadline for the U.S. heading into recession is now one year from tomorrow. Enjoy the expansion while it lasts.