Gas prices continue to set new records what seems like every passing week at the moment, with the national average at the time of this writing sits at just over $5.00 a gallon according to AAA. And while some more privileged buyers have opted for electric vehicles such as the (sold out) Ford F-150 Lighting, they aren’t a mainstay of life as of now. That being said, research shows that drivers are just dealing with the soaring gas prices. And they will continue to do so until the expected break point of paying upwards of $6.00 a gallon and crude oil prices going over $140 a barrel become a reality. Both of those could happen by the end of the year according to some analysts.
Per Reuters the current demand for gasoline has not faltered due to rising prices. Some data suggests that driving habits have changed, such as not entirely filling the tank, but this has yet to really impact overall demand. Further data shows that traffic congestion across the globe, with exception of China, who is still exercising strict coronavirus lock-down safety measures, has risen in the past few weeks, but is still less than pre-pandemic levels.
Navigation group TomTom finds that drivers in New York and Los Angeles aren’t making as many trips now. However, an analyst with Gasbuddy, Patrick DeHaan reveals he saw no demand destruction as of yet. When asked where the threshold is, he mentioned anywhere above $5.50 and certainly once we surpass $6.00 demand will see significant change. According to the Reuters report, the CEO of global commodities trader Trafigura expects crude oil prices to hit $150 a barrel sooner than later and soar higher by the end of the year.
Exacerbating the issue is the fact that automakers are struggling to build both electric vehicles, like the Rivian R1T, and fuel sippers like the Jeep Wrangler 4xe or Ford Maverick hybrid. The used vehicle market is in dire straights as well, with prices rocketing up as a result of new vehicle scarcity. Are there forces at work that’s pushing us all into autonomous econoboxes? Only time will tell on that one.