Weekly Market Insight . Average Price Per Gallon of Regular Gas; Conventional Areas . 02/22/12

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Average Price Per Gallon of Regular Gas
Conventional Areas
February 22, 2012
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Source: Energy Information Admin.
The price of gasoline has been in the spotlight recently, rising by $0.34 since late December to an average of $3.52 per gallon of regular. This is well short of the recent peak of $3.91 in May 2011 and the record peak of $4.05 in July 2008, but some analysts have already sounded an alarm that prices could reach those levels during the summer driving season with the potential to dampen retail sales and imperil the labor market recovery. Geopolitical turmoil in Iran appears to be the main culprit, with growing demand in the U.S. and the actions of speculators playing supporting roles. The recent trend mirrors price increases last summer resulting from turmoil in Libya. High gas prices have had little impact so far on chain store sales data from ICSC, but they may be showing up in the Thomson Reuters / University of Michigan Consumer Sentiment Survey where the preliminary February reading fell unexpectedly. For commercial real estate, shopping centers would bear the brunt of rising gas prices. Longer term, it will be interesting to see if shippers react to sustained higher fuel prices by opening more but smaller distribution centers and increasing the use of lower-cost rail intermodal transport. That trend was noticeable when prices spiked in 2008.
Robert Bach, Senior Vice President, Chief Economist, has 30 years of professional experience in real estate market research, consulting and city planning. His commentary on the real estate markets is provided here on a weekly basis.

Need more information? Contact:

Robert Bach
Senior Vice President, Chief Economist
312.698.6754

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© 2012 Grubb & Ellis, all rights reserved.
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About CRE Northwest

Specialist in office & investment real estate in Seattle & the Eastside
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