As world appetite grows, will oil hit $200 a barrel?

Oil prices bounced to more than $100 a barrel on Jan. 2 and again in February and March. Some Wall Street traders have started to bet on $200 a barrel.

Consumers seem be used to the high price of gas. A study by researchers at the Institute of Transportation Studies at the University of California, Davis, showed that consumers are now less responsive to high gas prices.


Another institute study found no evidence of economically rational decision-making about fuel economy when Californians buy their vehicles.

Energy expert David Greene and American Honda’s John German point to Department of Energy data that in 1980 it took 9 percent of personal disposable income to drive 10,000 miles; in June 2007 it took about 4 percent to cover the same distance.

Does that mean the cost of oil will continue to rise until consumers really feel the pain and do something about it?

This leads to another question: Will New York Times columnist John Tierney lose his $5,000 bet to Texas investment banker Matthew Simmons, who wagered that by 2010 the average price of a barrel of oil will reach $200, adjusted for inflation?

Sacramento Bee