There is an interesting dichotomy in the energy retail markets as oil prices have fallen since their highs in March, but gasoline prices in both Europe and the US have stayed the same, or increased. Fundamentally, it's no longer a question of supply and demand as the talking head pundits keep telling us, but rather, it is the result of inflation that is finally rearing its head to consumers, contrary to Bernanke's bloviating.
Wholesale gasoline futures are down around 8% from their late March peak. This follows the late February peak in WTI crude prices. Joseph Brusuelas of Bloomberg's Economics Brief today asks whether this signals a peak in retail gas prices - which are up around 20% this year. In a very similar seasonal and monetary cycle manner to last year, energy prices are rolling over but will retail follow again this time as it did before. For sure this would provide direct releif to households, as Brusuelas notes, that have seen average hourly earnings decline for 13 consecutive months. The typical lag is 2-4 weeks before wholesale improvements start showing up in retail prices and while we wait with baited breath for that spending relief, we note that at the same time, the average price of gasoline in Europe just broke back above $10 per gallon (equivalent) to its highest in almost a year showing no signs of retracing at all. - Zerohedge
And with the summer driving season just around the corner, the staycation may be the place to hang out for people looking to relieve their stresses, and not add to it each time they go to fill their tanks.