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U.S. Motorists Driving Less, Spending More

Fuel prices barely respond as fuel consumption slips.

by on Jul.13, 2011

Americans are driving less but still paying more.

Whatever happened to the law of supply-and-demand?  Despite a notable reduction in the amount Americans are driving, fuel prices have not responded in traditional fashion and are, if anything, continuing to rise after a brief respite.

The Benchmark West Texas Intermediate Crude jumped more than 2% on Tuesday, climbing $2.28 a barrel, to $97.43.  In Europe, closely-watched Ice Brent Crude did slip slightly in early Wednesday trading, but had still climbed to $117.36 a barrel.

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Many economists had expected the oil price numbers to keep falling, as they did leading up to the beginning of the month, reflecting worsening economic news around the world – which often translates into reduced demand.  In earlier times, prices almost certainly would have slumped on word that U.S. motorists have continued curbing their driving – now for the fourth month in a row.