00:00 Brooke
Americans, a few years ago, they were seeing $5 at the pump, and that had a profound impact on consumer sentiment about the way they they felt that things were going about the economy. And now, yes, we’re seeing gas prices at $3, but we’re also seeing Americans face an affordability crisis with higher rent, higher child care costs, also higher healthcare costs. So, how are you thinking about the impact that gas prices, albeit lower, have on consumer sentiment right now moving into the new year?
00:31 Patrick DeHaan
Yeah, Brooke, it’s kind of a self-fulfilling prophecy for some Americans. They view falling gas prices as a sign of economic duress. I don’t yet think that’s the case. Gasoline demand still holding relatively strong. To your point though, in an era that you see inflation at the grocery store and in your rent and tax bills, you know, it’s certainly good news that Americans are going to be spending likely tens of billions of dollars less on gasoline in 2026 than 2025. And that’s been by by the way now a four-year trend ever since the peak in 2022. Of course, back then the economy had reopened, Russia’s invasion of Ukraine created this super cycle, and we’ve been seeing prices moderate. 2026, not a whole lot of energy price inflation when it comes to petroleum or at least I should say downstream products like jet fuel, diesel and gasoline. And that could help motorists feel a little bit of relief when it comes to some of the skyrocketing other costs you mentioned like rent and grocery prices, which may remain stubbornly high.
01:21 Brooke
Now, this holiday season, 2% more Americans are expected to travel. They’re expected to do more year-end road trips. What does that tell you about the way that Americans are thinking about just how much ability they have to travel in this sort of environment where they’re really cutting back, they’re being more choiceful, maybe choosing to hit the road instead of flying?
01:46 Patrick DeHaan
Yeah, Brooke, I mean, look at it. It’s the one good that gasoline, you see it no matter if you need it or not, right? It’s almost on every other street corner. So Americans have this affinity to gas prices and when they see them low, you’re right. Some people feel really good about being able to take those road trips or maybe spontaneously go somewhere for the weekend even in winter. Uh maybe not so much as we see in the summer, but absolutely. I mean, that gives Americans somewhat a positive feel of being able to do those things. So lower gas prices on one side of the political spectrum, uh lead to freedom and positive feelings, but on other sides, like I mentioned, there’s some Americans that are suspicious that low gas prices could be a sign of a failing or slowing economy. And a lot of those feelings come back from COVID when gas prices plummeted and it was a sign of things were going to get a lot worse. This time around, these low gas prices are not yet necessarily a sign of a recession or a slowdown. They’re a sign of increased supply. So let’s get that correction out there. But yeah, a lot of Americans certainly starting to enjoy these lower prices, especially now 11 states where we’re seeing some stations below the $2 a gallon mark. Certainly really eye-popping to see some of those figures that we’re seeing across some US gas stations.
02:44 Brooke
Wow, below $2. I saw in your notes, Oklahoma, Arkansas, Colorado, some of the states seeing some of the lowest prices. And hey, if you’re hitting the road, maybe we’re heading there. Patrick DeHaan, thank you so much for joining us and safe travels to you and your family this holiday season.
03:04 Patrick DeHaan
Happy New Year, Brooke.