U.S. retail gasoline demand fell last week after high gasoline prices dampened demand in all U.S. regions, MasterCard Advisors' SpendingPulse report showed Tuesday.
Average gasoline demand fell 1.8 percent to 8.953 million barrels per day in the week to March 4.
Year-over-year, demand slipped 1 percent.
Retail gasoline prices rose 19 cents last week to $3.43 per gallon, 27 percent higher than a year ago, after crude oil rose to a 29-month high on unrest in the Middle East, the report said.
This was the largest weekly price increase since October 2006, when MasterCard first started recording price data.
"We saw signs of demand destruction in 2008, when gasoline was priced between $3.15 and $3.20 a gallon. This year, it's hard to know when that will happen because prices grew so quickly," said Michael McNamara, Vice President of MasterCard Advisors SpendingPulse.
McNamara said the year-on-year decline in gasoline demand started nine to 10 days ago and consumers all over the U.S. started pumping less last week.
"There was a national reaction to prices. Every region was a red," McNamara said.
The U.S. Energy Information Administration said on Monday retail gasoline prices soared another 13.7 cents last week to $3.52 a gallon.
It was the second biggest jump in pump prices during a two-week period ever recorded by the government.
MasterCard expects the slightly improved employment outlook will temper sharp year-over-year drops in demand as more consumers drive to work.
"Historically, however, when prices rise toward record territory and as consumers expect higher prices in the near term, drivers begin to cut back on leisure travel and consolidate shopping trips," said John Gamel, director of economic analysis for MasterCard Advisors' SpendingPulse in an email.
Over the latest four weeks, U.S. gasoline consumption rose by 1.6 percent year-over-year.
MasterCard Advisors estimates retail gasoline demand based on aggregate sales activity in the MasterCard payments system, coupled with estimates for all other payment forms including cash and checks. MasterCard Advisors is a unit of MasterCard Inc.
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