[kokoda]

The price will bounce around for a while ... but the long term trend is that it will continue to rise.

[Lanthanide]

That's not entirely true, Hogan. Oil demand is highly inelastic, which works in both directions - some forms of demand destruction will be permanent. For example if you normally commute 50miles to work and back (this seems absolutely ridiculous to me, living in New Zealand) but because of rising fuel prices you move closer to your job so that you only have to commute 10 miles a day, once the price goes back down you're unlikely to start driving an extra 40 miles each day for no reason.

So demand destruction can be permanent, but it requires prices to go up and stay up for an extended period of time. I don't believe the prices have stayed up long enough to make serious inroads yet, however.

[eastbay]

$this->bbcode_second_pass_quote('Lanthanide', 'T')hat's not entirely true, Hogan. Oil demand is highly inelastic, which works in both directions - some forms of demand destruction will be permanent. For example if you normally commute 50miles to work and back (this seems absolutely ridiculous to me, living in New Zealand) but because of rising fuel prices you move closer to your job so that you only have to commute 10 miles a day, once the price goes back down you're unlikely to start driving an extra 40 miles each day for no reason.

So demand destruction can be permanent, but it requires prices to go up and stay up for an extended period of time. I don't believe the prices have stayed up long enough to make serious inroads yet, however.

[Heineken]

China and India are adding thousands of new vehicles to the roads every day. Not to mention a blizzard of smaller ICEs like lawn mowers, water pumps, chainsaws, you name it.

Every day there are about 200,000 new people on the planet, net of deaths. Even if most of them won't drive cars, they add ever more pressure on the fossil-fuel supply (e.g., just by eating food and wearing clothes).

Out of long habit, Americans keep thinking they are the only game in town. This is no longer true, and every day it becomes less true.

Think of world oil consumption as a sort of gigantic mouth. It keeps opening wider, despite our puny "conservation" efforts.

Prices changes from day to day or month to month mean nothing. They are the result of volatile and temporary market and financial forces that have little to do with the underlying truth that we are in deep doo-doo.

[Lanthanide]

To the two posters above - yes, I understand that.

I was specifically replying to this point:

$this->bbcode_second_pass_quote('', 'A')ny demand destruction will be temporary until the price of oil falls again.

[burtonridr]

wow, oil has dropped like a stone today.... 8 points...

12% since its new high a few days ago

[smallpoxgirl]

Natural gas has been falling for 2 weeks now. It's down like 30% and probably has another %10 to fall before it hits support. 40% is pretty standard for a correction within a trend though.

[emersonbiggins]

$this->bbcode_second_pass_quote('smallpoxgirl', '4')0% is pretty standard for a correction within a trend though.

[alokin]

Oil price declining, DOW rose a bit, economic news not that bad - someone pushed a bit?
I bet next weel will be the next raise upwards (I don't buy)

[Heineken]

$this->bbcode_second_pass_quote('Lanthanide', 'T')o the two posters above - yes, I understand that.

I was specifically replying to this point:

$this->bbcode_second_pass_quote('', 'A')ny demand destruction will be temporary until the price of oil falls again.

[JimW]

I think the U.S. congress will eventually have to cave to public pressure to drill for oil. Once the oil speculators see that the U.S. is serious about getting more oil the price will tumble….temporarily. Finding the oil and bringing it to market is a long term project and these new wells will do little in the long run to ward off the effects of PO. It won’t take long for the market to figure this out and we’ll see the prices rise again.

[smallpoxgirl]

$this->bbcode_second_pass_quote('emersonbiggins', '')$this->bbcode_second_pass_quote('smallpoxgirl', '4')0% is pretty standard for a correction within a trend though.

[cube]

$this->bbcode_second_pass_quote('Heineken', 'C')hina and India are adding thousands of new vehicles to the roads every day. Not to mention a blizzard of smaller ICEs like lawn mowers, water pumps, chainsaws, you name it.

Every day there are about 200,000 new people on the planet, net of deaths. Even if most of them won't drive cars, they add ever more pressure on the fossil-fuel supply (e.g., just by eating food and wearing clothes).

Out of long habit, Americans keep thinking they are the only game in town. This is no longer true, and every day it becomes less true.

Think of world oil consumption as a sort of gigantic mouth. It keeps opening wider, despite our puny "conservation" efforts.

Prices changes from day to day or month to month mean nothing. They are the result of volatile and temporary market and financial forces that have little to do with the underlying truth that we are in deep doo-doo.

[dissturbbed]

it should start to rise again today "friday"

[outcast]

$this->bbcode_second_pass_quote('', 'T')oday it's "falling" to $134/$136 *rolls eyes*

[smallpoxgirl]

$this->bbcode_second_pass_quote('smallpoxgirl', '')$this->bbcode_second_pass_quote('emersonbiggins', '')$this->bbcode_second_pass_quote('smallpoxgirl', '4')0% is pretty standard for a correction within a trend though.

[yeahbut]

$this->bbcode_second_pass_quote('Heineken', 'C')hina and India are adding thousands of new vehicles to the roads every day. Not to mention a blizzard of smaller ICEs like lawn mowers, water pumps, chainsaws, you name it.

[Heineken]

Good questions, yeahbut.

Chindia is obviously quite vulnerable to financial busts---although perhaps less vulnerable than we are, since we foolishly transferred a huge portion of our manufacturing base to them, and gave them and the Arabs all our cash in exchange for endless mountain ranges of debt. Now that they have their own massive industrial society, they need a lot of their manufacturing capacity for their own use and not just export. So that buffers the impact on them if WE turn our white bellies to the sky.

Also, no matter what happens to Chindia economically, its oil consumption will always be vastly higher than it was before the big boom.

Let's say Chindia has a big recession and the number of cars it's adding to the roads declines by an order of magnitude. That's still lots of new cars that weren't there before. At a time when the total number of ICEs should be falling, not rising, to adjust for the growing constraints on oil production.

[yeahbut]

$this->bbcode_second_pass_quote('Heineken', 'G')ood questions, yeahbut.

Chindia is obviously quite vulnerable to financial busts---although perhaps less vulnerable than we are, since we foolishly transferred a huge portion of our manufacturing base to them, and gave them and the Arabs all our cash in exchange for endless mountain ranges of debt.