[pup55]

Products Supplied

Here's the spreadsheet for products supplied.

I know what they did. They used "production" which is "how much the refineries made" instead of "products supplied" which is "how much people bought".

$this->bbcode_second_pass_quote('', 'N')ov 30, 2007 9092
Dec 07, 2007 9155
Dec 14, 2007 9112
Dec 21, 2007 9004
Dec 28, 2007 9070
Jan 04, 2008 9116
Jan 11, 2008 8978
Jan 18, 2008 8965
Jan 25, 2008 8887
Feb 01, 2008 8739
Feb 08, 2008 8909
Feb 15, 2008 8840

[aahala]

$this->bbcode_second_pass_quote('pup55', '
')


I know what they did. They used "production" which is "how much the refineries made" instead of "products supplied" which is "how much people bought".

[eastbay]

Oregon now requires a 10% ethanol mix in gasoline sales. If my math is correct, this means Oregon just experienced a 10% drop in gasoline sales.
Yet the same, or about the same, amount of fuel is still being pumped into vehicles. So a headline could accurately scream, 'Oregonians use 10% less gasoline!'

Maybe someone could run the numbers to see what percent of fuel pumped nationally is really ethanol. This could be part of the reason for a small drop in gasoline sales. After all, the only reason we now practice crop burning is to keep the nation running with less gasoline, so less gasoline use should be expected.

[dohboi]

So if these numbers are not real or are statistically insignificant, when do we expect price increases to significantly affect consumption? It seems to me that someone came up with a figure for price elasticity for gas, but I can't remember what it is. Does anyone have it? As I recall, there had to be a pretty significant price increase before even a small change in behavior would be noticed.

Of course, that is the expected pattern for what a junkie is willing to pay for his next fix.

[mos6507]

$this->bbcode_second_pass_quote('The_Toecutter', 'W')e can drop gasoline consumption perhaps 30% before Americans no longer buy enough gas to drive to work. We will adapt over the next few years, but it will be a scary few years. They will not be as scary as the years that come after them.

[mos6507]

$this->bbcode_second_pass_quote('eastbay', 'O')regon now requires a 10% ethanol mix in gasoline sales. If my math is correct, this means Oregon just experienced a 10% drop in gasoline sales.
Yet the same, or about the same, amount of fuel is still being pumped into vehicles. So a headline could accurately scream, 'Oregonians use 10% less gasoline!'

Maybe someone could run the numbers to see what percent of fuel pumped nationally is really ethanol. This could be part of the reason for a small drop in gasoline sales. After all, the only reason we now practice crop burning is to keep the nation running with less gasoline, so less gasoline use should be expected.

[kmann]

I did the price elasticity calculations following the hurricanes in '05, using the price shock and resulting demand reduction factoring in change of GDP. I don't think it would necessarily be an accurate predictor of current price elasticity. That was a price shock and most people understood that shortages could occur without conservation. I think I've seen another thread dealing with price elasticity since then, but it's been awhile.

Gasoline demand analysis

[frankthetank]

I don't see anything around me to suggest that consumption is down. All things seem "normal" when it comes to the amount of traffic on the roads. I think people will cut other areas before they cut gas.

[dohboi]

Thanks, kmann. It looks like you found around 7% demand destruction for every dollar per gallon increase. Others mentioned that there may be sudden shifts and discontinuities in consumption in the 3-4 dollar range. It may be interesting to see another analysis in the next few months, as these prices start to become reality.

[pup55]

$this->bbcode_second_pass_quote('', ' ')I don't think it would necessarily be an accurate predictor of current price elasticity.

[dohboi]

Thanks, pup.

Do you think there is a point where significant discontinuities kick in? Is this a punctuated equilibrium type of situation, where suddenly people just stop driving, or stop driving alone? If so, any guess where that point would be?

Of course, Europeans have been living with gas prices double or triple what Americans have had for quite some time, though with a car fleet and a transportation infrastructure that are much more efficient.

[threadbear]

There will be significant demand destruction in the U.S, which should temper prices. However, a weakening currency and a speculative flow of money into oil futures, anticipating further inflation and possibly major new problems in the Middle East, will more than offset the tempering effects of demand destruction.

The only thing that can bring the price down is if China and India start to turn down economically, in a huge way, if the dollar quits dropping, and if the Middle East miraculously becomes more stable.

[dohboi]

Threadbear wrote:

"and if the Middle East miraculously becomes more stable."

That was a good one, especially in light of the Falon resignation. Now that that destabilizing force is out of the way, Cheney and co. are not free to implement their benign plans to fully pacify, er, stabilize the entire region.

[misterno]

Who cares about the decline in US when china and india's consumption is growing in double digits.

This will more than offset the decline in US hence oil=$500/brl in 5 years

[pup55]

$this->bbcode_second_pass_quote('', 'D')o you think there is a point where significant discontinuities kick in?

[threadbear]

$this->bbcode_second_pass_quote('misterno', 'W')ho cares about the decline in US when china and india's consumption is growing in double digits.

This will more than offset the decline in US hence oil=$500/brl in 5 years

[pup55]

$this->bbcode_second_pass_quote('', 'D')ate Price 8-wk cts 8-wk chg cons change
Sep 05, 2005 311.7 74.8 24% -6.48% Katrina/Rita
Apr 24, 2006 296 66.2 22% 0.83%
Apr 08, 2002 145.4 30.6 21% 4.76%
Apr 16, 2007 292.2 58.1 20% 1.88%
Apr 19, 1999 117.5 22.6 19% 9.92%
May 08, 2006 295.5 54.7 19% 0.63%
Apr 26, 1999 117.1 21.6 18% -4.46%
May 14, 2001 174.8 30.4 17% 6.05%
Apr 11, 2005 232.1 38 16% 2.20%
Mar 13, 2000 156.6 24.8 16% -1.98%
Feb 17, 2003 170.1 25.8 15% -4.11% GWII

[misterno]

$this->bbcode_second_pass_quote('threadbear', '')$this->bbcode_second_pass_quote('misterno', 'W')ho cares about the decline in US when china and india's consumption is growing in double digits.

This will more than offset the decline in US hence oil=$500/brl in 5 years

[pup55]

Well well, look what Google brings up when you put in April 26, 1999:

Columbine Time Line

Evidently no one felt like driving that week.

[joewp]

Gas consumption isn't going down in the US any time soon. This is from my local paper.

Asbury Park Press
$this->bbcode_second_pass_quote('', '
')Soaring gasoline prices haven't changed driving habits in Monmouth and Ocean counties. But with the average price at the pump in New Jersey topping $3 per gallon, some drivers are scrambling to cut back on other expenses.

But driving fewer miles? That's something Millstone Township resident Albert Del Cristo says he can't consider.

“I drive a lot because of my job and I can't drive less. I have to drive. People are just sucking it up and paying the higher prices,'' said Del Cristo, 44, adding that he believes people will be inclined to spend less on items such as restaurant tabs and movie tickets rather than do less driving.