U.S. Oil Consumption On The Decline...Permanently

Last month's clunkers program, which saw nearly 700,000 guzzlers averaging 15.8 mpg exchanged for vehicles that were 58% more fuel efficient (25 mpg) was a sign of what's in store for the auto and petroleum industry.

"U.S. gasoline consumption fell more than 7% from its 2007 peak in the first quarter...Yes, that in part reflects the effects of the punishing economic downturn. But the slump actually has masked the beginning of a profound, long-term shift that will affect oil and auto stocks for years.

Thanks to a confluence of factors -- a legislative push to wean the nation off foreign oil, an end to very cheap fuel, a global rush toward fuel-efficient cars, fewer people driving to work and more citizens becoming concerned about the environment -- U.S. gasoline consumption might never surpass the high of the summer of 2007, when we guzzled 400 million gallons a day.

Unfortunately for U.S. drivers, $3 or more might be the new norm."

Barron's senior editor, Kopin Tan explains this phenomenon in a short video at the base of the article.

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