National and international economists have been cautiously observing the decline in the price of oil on the world market. Since Monday oil price has fallen from a high of $135.09 per barrel to just under $127 on Wednesday.

The keenness in which consumers of oil, especially consumers of gasoline, have been looking at the price decline gives real meaning to the proverb, “A drowning man clutches to a straw.” However, the decline in oil prices doesn’t indicate that a trend is setting in, as over the past few months the level of oil prices has been erratic. Neither are there signs that the fall in oil prices will be reflected in the price of gas.

There are indications, however, that there is a decline in gasoline demand by U.S. consumers and this could have a profound impact on international oil prices. Reports suggests that driving over the Memorial Day weekend, traditionally the beginning of the summer driving period when there is high gas consumption, was the lowest in several years. The Schork Report, edited by Stephen Schork, referred to the latest statistics from the Federal Highway Administration, noting that "estimated vehicle miles traveled ... on all U.S. public roads for March 2008 fell 4.3 percent, or 11 billion miles, compared with March 2007. "In fact, this is the first time estimated March travel fell since 1979,” said the newsletter.

The indicators suggest that as the gas prices rise over $4 per gallon demand will continue to fall. With the U.S. being the world’s largest oil consumer, fluctuations in the nation’s consumer demand can definitely have an impact on international oil prices.
A survey by National Weekly of eight gas stations in the tri-county area revealed that demand for gasoline has declined by 4.5 percent over the past month.

Fitzie, a manager of a BP petroleum station on Federal Highway in Boca Raton where a gallon of regular gasoline was being sold for $3.98 on Wednesday morning told National Weekly, “It’s not that people are not buying gas. The problem is that they are buying less gas each time they pull up at the pump because they can’t afford the rising prices. They may be spending the same as before, but this buys less gas.”

Another station manager at a Hess petrol station in Fort Lauderdale said that he has noticed a distinct correlation between rising gas prices and consumer demand. “We have raised the price by some 45 cents per gallon over the past month, and over that period we have noticed a fall in the quantity of gas sold. People are either driving less, or buying less gas.”
At a Mobile Station in North Miami, the station manger, Carlos, told National Weekly that at that station, deliberate attempts have been made to keep prices a few cents below the national average. On Wednesday the price of a gallon of regular gas was being sold at $3.90 compared to the national average of $3.94. “Demand here is very high, but we still notice that each time we raise the price less customers fill their tanks.”

Economic and energy analysts like Michael Lynch; president of Strategic Energy & Economic Research, Inc, located in Winchester Massachusetts has been reported as saying he thinks energy investors are selling oil on the recent data that suggests Americans are driving less. An interesting guide that oil prices could be in a declining trend is that on the ICE Futures exchange in London July prices for crude oil was being quoted at $126.17 per barrel.

“I am keenly observing the oil prices,” Garth Lawson, a customer at the Mobile station in North Miami told National Weekly. “I notice oil prices are sensitive to the demand for gas. If consumers continue to buy less gas I believe oil price could fall below $100 per barrel soon. At least that’s what I am hoping.”