Retail gasoline demand down on $4 pricetag

1/07/2008 - 19:03

NEW YORK (Reuters) - U.S. retail gasoline demand remained in a slump as high prices at the pump trimmed demand for the fuel, MasterCard Advisors said Tuesday.

"The regional year-over-year view shows all regions but the Midwest are consuming less gasoline when compared to a similar week in 2007," said Michael McNamara, vice president of research and analysis at MasterCard Advisors.

U.S. consumers were pumping about 200,000 barrels per day less gasoline than they were at this time last year, McNamara said.

Gasoline consumption in the West Coast, Rocky Mountain and New England regions was down the most, with decreases greater than 5 percent when compared with 2007, MasterCard said in its weekly SpendingPulse report.

The Midwest, with has some of the cheapest gasoline prices in the nation, was the only region with a demand increase.

The national average price of gasoline dipped 1 cent last week, but at $4.06 per gallon was more than 36 percent higher than this time last year.

Despite a year-on-year drop in demand of 1.99 percent, there was an uptick in gasoline consumption ahead of the Fourth of July holiday weekend, McNamara said.

American motorists pumped an average of 9.545 million bpd last week, an increase of 1 percent from the previous week.

However, weekly demand dropped 2.1 percent when compared with the same week last year.

Fourth of July weekend is traditionally the busiest holiday travel weekend of the year. But for the first time in 10 years, travel is expected to decline, according to the travel and leisure group AAA.

The four-week moving average for gasoline demand was down 2.9 percent at 9.345 million bpd, dropping for the 12th week in a row.

Meanwhile, in a Reuters poll, analysts forecast the Energy Information Administration would report a decrease in gasoline supplies, with demand expected to be flat or lower ahead of the July 4 holiday weekend. The EIA will release its weekly inventory report on Wednesday.

MasterCard Advisors estimates retail gasoline demand based on aggregate sales activity in the MasterCard payments system coupled with estimates for all other payment forms. MasterCard Advisors is a unit of MasterCard Inc .

(Reporting by Rebekah Kebede; Editing by John Picinich)

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