Photo: Flickr/David Morris
Morgan Stanley’s Hussein Allidina’s latest crude oil note revises 2012 gasoline demand up by 100k barrels per day to 8.68 million, although he sees many downside risks. What struck us is a larger argument that overall gasoline demand peaked in 2007.
The reason: teenagers.
“A University of Michigan study shows that only 75% of 19 year-olds in 2010 held a drivers licence, down from 87% in 1983. With fewer young adults driving, vehicles per capita will likely continue to decline.”
Plus, vehicle miles traveled are still way down, he writes.
“Medium term, a below-par US recovery with elevated unemployment and anemic personal disposable income in an environment of high oil prices imply that the latest down cycle in vehicle miles traveled may not be over. Furthermore, even when VMT manages to rise cyclically again, higher vehicle efficiency will help offset the increases in miles driven. The effect may be even more pronounced than we have modelled. With CAFÉ standards continuing to increase, deferred car purchases today (cyclical) may result in a more efficient fleet tomorrow.”