A Discussion of the Effects of Price on Demand

Heading Out writes: The rising price of oil is obviously having some effect on overall demand. Realistically it is first being felt in the poorer nations of the world. Indonesia, despite its OPEC representative wanting higher prices, is domestically hurting as the price rises. Bolivia is seeing riots over what should be done with their natural gas supplies; Yemen is seeing riots following the doubling of gas prices. Yet there is some ingenuity in the world, in Papua New Guinea they are using coconut oil from abandoned coconuts to power a truck.

Rising prices may also be having an effect on both Indian and Chinese demand. And this may have a global effect, since it was their unanticipated increase in demand last year, which caught a number of people by surprise…

More after the jump at The Oil Drum.