Don't hope for gas prices to drop, says oil economist

By Ángel González
Seattle Times business reporter

John Felmey, of the American Petroleum Institute(pic)

Most drivers think $4 per gallon of gasoline is too much to pay in a weakening economy. Sales for sport-utility vehicles are plummeting. And people are actually driving less.

But don't expect prices to fall anytime soon despite slackening domestic demand, American Petroleum Institute chief economist John Felmy said Wednesday. The API, based in Washington, D.C., represents the U.S. oil and gas industry.

Gasoline prices are driven by the high cost of crude oil, which surpassed $125 a barrel on Wednesday. That's in large part because the slowdown in U.S. oil demand is being offset by growing consumption in China, India and the Middle East, said Felmy, who came here for a speech to the Seattle Economics Council.

"You have 2 billion people who want cars," he said.continue.....