U.S. consumers seem to have reverted to their gas-guzzling ways in response to this duration of sliding energy prices.
Why current oil prices don\’t tell the energy sector\’s whole fortune
Investors in the Canadian energy sector have certainly felt the pain of plunging oil prices, as the S&P/TSX Energy Index is down a lot more than 25% since June 2014, but some say things might be worse.
Oil has fallen roughly 60% during the same period, after peaking near US$107 per barrel, yet Canadian Natural Resources Ltd., Suncor Energy Inc. and other names within the benchmark Canadian energy index are still trading at a lofty 65x forecasted fourth-quarter earnings. Keep reading.
The year-over-year trend in gasoline consumption in unit (real) terms swung from flat at the beginning of 2014 to 3% for the first two months of this year. The customer has not been filling up the tank like this in more than a decade.
This year’s development in gasoline consumption roughly matches the 5% year-over-year rate of growth in miles travelled through the nation\’s motorists. Previously 12 months, Americans have driven a record of more than three billion miles making an uncommon 294 million trips towards the country\’s national parks.
One effect of this increase in demand is the fact that real spending growth at theme parks and the like expires nearly 9% over the past year, almost tripling the overall trend in consumer expenditures. This is echoed in Walt Disney Co.’s stock price, which has been hitting new peaks recently and is now above US$100.
Meanwhile, the accommodation and hotel segment of the S&P 500 is up 23% over the past year, a lot more than doubling the development in the overall market.