So far Oil hasn’t been able to muster enough steam to return to record levels. The reason? Commodity traders are fearful that demand has slipped in the giant U.S. market. In the last four weeks alone, American drivers have cut another 2.4% of their gas usage from one year ago. Yes, it appears the high cost of gasoline has been making people conserve.
This newly found energy thrift has oil investors, many of who are hedge fund companies that have come to the game relatively late, nervous enough to thwart a potential rally.
Since Hurricane Dolly did not threaten the U.S. oil supply chain, there’s no logical reason for a run-up this week. The lower prices of oil are also being reflected at the pump in the form of somewhat lower gasoline prices.
Analysts also believe that once drivers change their habits to less fuel consumption, they’re unlikely to shift back quickly to their old gas-guzzling habits. That could spell doom for oil demand in coming years.