The Washington PostDemocracy Dies in Darkness

The Hummer is back. Thank falling oil prices.

(AP Photo/Mark Avery, File)

The military-style Hummer H1, more tank than truck, disappeared from the new car lots long ago, killed off by General Motors for the sin of guzzling a gallon of gas every 10 to 12 miles. And as the cost of gas hung above $3.50 for four years, even used Hummers languished on used lots, too.

That is, until the price of crude oil — and gasoline — started to nosedive. “We’ve sold a few just in the last few weeks,” said Blake Sharkey, an assistant sales manager at Stadium Auto in Arlington, Texas.

Over the last month, auto analysts say, consumers have shown a fresh interest in the kind of SUVs — Hummers, Lincoln Navigators, Ford Explorers — that typified America’s bigger-is-better mindset of twenty years ago. The new mindset among some car buyers is one of the most unexpected consequences of a domestic oil boom that has helped cause global crude prices to plummet in recent months, with the cost of a gallon of gas now below $3.

As oil prices hit a three-year low, Americans are starting to see price changes that could ultimately influence everything from their grocery shopping to their heating bills to their travel. The lower prices — should they be sustained, as expected, for the next few months — have the potential to nudge the U.S. further away from its dreary post-recession mindset, leaving instead a nation with more affordable air and road transportation options, higher consumer confidence, and yes, a few more gas guzzlers driving around.

Calculating the consumer savings from cheaper oil takes some guesswork. In New England, where many homes still use heating oil, bills will be trimmed by about $360 this winter, the U.S. Energy Information Administration says. Prices of everything from vegetables to kids’ toys could also tick down in the coming months as the costs of shipping those products around the world decline.

Then there are the gasoline prices, which account for the most significant windfall. The average American spends about $2,600 yearly on gasoline, according to Barclays — about what is spent on restaurants, and twice what is spent on phones and phone bills. The 20 percent slide in gas prices since June has already saved the average person $520.

Americans aren’t sitting on that money, economists say. Rather, the money is being used for discretionary spending — eating out, entertainment, clothing, electronics. “Some of these categories, such as restaurants and apparel, have been sluggish for years,” Barclays said. “Lower gas prices could be a catalyst to reverse some of these trends.”

For airlines, fuel accounts for about one-third of expenses, and cheaper fuel could save the industry about $5 billion in 2015, J.P. Morgan analysts say. That could lead to less expensive tickets, though airlines might also just grab the profits or fly more routes.

Crude oil prices tend to be volatile, and they typically fall when the global economy softens. But in this case, prices have been driven downward by what some experts describe as a “perfect storm” of factors.

Demand in developed countries (including the United States) is down over the last few years, the result mostly of improving automotive fuel efficiency. Meantime, supply is way up, helped by U.S. wildcatters riding the “fracking” boom in the prairies of North Dakota and the plains of Texas.

Ordinarily, Saudi Arabia, the swing producer in the Organization of Petroleum Exporting Countries, cuts its production when prices slump. But recently, the kingdom, in a bid to hang onto market share, has kept its production high and let prices slide.

“Pretty simple economics right there,” said Tom Kloza, global head of energy analysis for the Oil Price Information Service. “We’re using less. We’re producing more. That’s why prices are falling.”

The Saudis or other OPEC nations could surprise by changing their strategy, trimming production, and again driving up prices — closer to $100 per barrel instead of the current $78 for a barrel of the benchmark West Texas Intermediate. If prices continue to drop, U.S. producers could scale back exploration and production plans.

Some American consumers and business owners say they weren’t yet confident cheaper prices at the pump would stick. Instead, they say, they are treating the sub-$3 gas as a helpful little gift, but not as a green light to make major adjustments.

“When gas was up around $5, it was killing us,” said David Grant, 50, of Fairfax, who owns a regional pest management company and spends several thousand monthly in fuel for his fleet of Ford F-150s. “I went ahead and raised my prices on everybody else.”

This time, Grant said, he’s not lowering those prices, nor is he immediately reinvesting the savings. “It’s not enough yet to make some huge difference,” he said.

But others, particularly car shoppers, have already shown signs of being influenced by the cheaper oil prices.

One measure is the share of “trucks” — including pick-ups, SUVs and crossovers — among total vehicles sold. Before the financial crisis, trucks almost always outsold cars, in some months grabbing as much as 59 percent of the market. Post-recession, the industry has flip-flopped; cars are more popular.

But not in recent months. In September, the truck market share was 53.5 percent. In October, it was 53.6. That is the best sustained two-month stretch since 2005.

As for those Hummers? said interest in Hummer H1s on its site rose 11 percent last month, making it the fastest-growing older model among all vehicles.

“People were saying a few years ago, ‘Oh, trucks are over and everybody will drive really fuel efficient cars,’” said Jessica Caldwell, a senior analyst at “But like anything it’s cyclical.”

Those in the auto industry emphasize that the SUVs and pick-ups of 2014 are a different breed from those of the last decade. Tightened federal standards have set ever-increasing gas mileage targets, leaving automakers scrambling to find lighter materials and more efficient engines.

“I wouldn’t say the gas guzzler even exists any more,” said David Penske, chairman of Penske Buick GMC Truck, a dealership in Shillington, Pa.

Still, trucks lag decidedly behind the smaller vehicles in gas mileage. Some energy experts worry that even a few months of cheaper oil prices could cause the U.S. to reverse or slow a post-Great Recession move away from oil.

The environmental concerns are significant. All told, automobiles account for about 50 percent of an average household’s emissions, but that can swing widely based on the vehicle. A big SUV will produce about three times the annual greenhouse gas tonnage emitted by a Prius.

U.S. gasoline consumption has fallen about five percent since 2006 — even though the economy has grown 25 percent during that time. The change is due mainly to increased use of hybrid and electric cars and changing driving patterns, with younger Americans moving into cities and putting on fewer miles.

Some cities have even tried to get away from oil; Chicago, for instance, is starting to use taxis that run on compressed natural gas, or CNG.

If U.S. oil demand swings back up, that will help producers everywhere, including in the Middle East. Which might explain why they have an incentive to keep prices temporarily low.

“I would say that ultimately the best way to ensure stability against a volatile oil market is to reduce your demand and exposure,” said David Cook, a vehicles analyst at the Union of Concerned Scientists Clean Vehicles Program. “Low gas prices are great for the consumer, but history has shown they are unlikely to stay there. Fuel efficiency buys you an insurance policy.”