businessinside). This surprised me because I had expected that US consumers will respond to cheaper gasoline and spend more money for other goods and services.
The investment bank Morgan Stanley has a psychological explanation for the missing response (businessinsider). They think that the consumers ignore the price drop for gas because they believe that the price reduction is just temporary. According to last Friday's University of Michigan consumer sentiment survey report, consumers expect that gas prices will rise soon and we be much higher in the coming years.
I think these expectations are wrong and will become disappointed. US gas prices (minus 30%) fell much less than the price of oil (minus 50%) (fuelgauge). As I had explained recently gas prices should fall further and adapt to the cheaper oil in the coming months (driveby).
I also assume that the price for oil has to go deeper. Oil supply is larger than oil demand - thanks to the US shale oil revolution and more oil from recovering Iraq, Russia, Iran and other nations - leading to a growing oil glut (commodities). As a result the US oil inventories are on a record high. The exploration cost for shale oil and other resources are falling, driven by the technological progress and advances in engineering (seekingalpha). And there are more and more electric cars on the streets - reducing the demand for gasoline.
Therefore the US average price for gasoline should drop below $2 and stay there for years to come - in opposition to the pessimist expectations.