U.S. Gasoline Inventories

We are currently heading into summer driving season with very low gasoline inventories. If the trend does not change soon, we could be facing $4/gal gasoline this summer.

There was a study by some microeconomist in the last year or so (I'll try to find it) that said that in the US, demand for gasoline is so inelastic, that it would take prices of $7/gallon for significant changes in consumer behavior. So while $4/gallon seems high, my guess is it will just generate a lot of sensational "the sky is falling" kind of breathy press coverage, but there will be very little shifts from heavy trucks and SUVs or a movement from the exurbs to more dense living arrangements that reduce commute time.