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What a temptress cheaper gas is

A motorist pumps gasoline into his car at a Shell in San Rafael, Calif.

TEXT OF STORY

Kai Ryssdal: With carmakers already nervous about the future, today's oil news might have them wondering if they should hit the brakes on all those plans they have for fuel efficient cars. This morning, the Energy Department reported crude inventories were up. But the increase was a million barrels short of what was expected, and gasoline stockpiles actually fell.

C'mon, now, America, admit it. It's just you and me. Are lower prices at the pump luring you back to your old habits? Here's our senior business correspondent Bob Moon.


Bob Moon: When oil started plunging, a research executive at GM said his worst nightmare was prices falling to $65 a barrel oil. He worried aloud that Americans might not downsize if gasoline tipped below $3.50 a gallon.

Well, average pump price are now far below that. And Tom Kloza of the Oil Price Information Service sees signs at least some of us are backsliding.

Tom Kloza: It could be a little bit of a sugar rush, where the consumer goes back to essentially some bad behavior, some behavior that, in the long run, isn't going to help.

Already, U.S. pickup demand is back on the rise, after collapsing earlier this year. Their sales share is nearly what it was before oil prices hit their high-end tipping point. Kloza says, so much for the buyers being changed forever.

Kloza: They should not get lulled into a false sense of security in thinking that high prices are not around the corner.

But oil economist Jim Williams believes even truck buyers are still watching fuel economy.

Jim Williams: I think everybody that buys a vehicle right now is really thinking, 'What's the mileage going to be?' and 'Could it go up again?' I don't think Hummer sales are going to skyrocket.

Oil researcher Tom Kloza says prices will go up again, and there's no way of knowing how long the current slump will last. And it's now, he says, the country needs leadership that won't allow Americans to backslide again.

Kloza: If we start to emerge from the economic recession and find that oil prices are going higher, it'll be like sort of catching a second round of pneumonia after recovery.

Kloza says that's something all Americans can prevent -- if they can resist those lower pump prices.

In Los Angeles, I'm Bob Moon for Marketplace.

About the author

Bob Moon is Marketplace’s senior business correspondent, based in Los Angeles.
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The true price of oil is hard to decide. Speculation, Bush patronage of his oil buddies, conflicts, all contribute to the final price. Which is sad. American have 'weak' government policy on energy, -which mean feast or famine cycles. So, for now, its feasting time, -but the painful correction will come later. The bubble only emboldens the ignorant people into further bad habits, which will make their pain that much worse in the future. This oil bubble was really bad for our unregulated economy, -but for now, bring on the monster trucks! Let the orgy of oil consumption begin again.

I have not increased my gas purchasing because of the decline in gas prices. I am actually enjoying the fact that I can fill up my fuel-efficient sub-compact car for less...let's hope it continues!

Having just left the U.S to take an overseas job I pretty sure the attitude of Americans have not changed that much. With that being said, Americans have a tendency to persecute leadership that gears us from foreign gas. Nixon, Jimmy Carter, Gerald Ford. The reasons Rep. we're in power so long is because they road the coat tail of Mr. Ronal Regan who geared us in the totally opposite direction (not trying to make a political statement or bias just pointing out historical fact. Saying Regan did not lead us to cheaper foreign oil would be like saying the CIA didn't train Al Qaida to fight Russia).

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