If everyone does this, then the price may stay high (temporarily) even if the demand goes down. However, as far as I can tell this is only a short term thing and eventually the demand will determine the price.

Thanks , Gilbert

We only empower OPEC and the terrorist nations by buying their oil. Why not drill in the US and (notice the word and) look for alternative ways of transportation and new fuel types or sources? Why don’t you libs pressure on the democrats to solve the energy problem by working with the oil companies instead of trying to put them out of business in the US? Let’s not forget that the dems are in control of congress and everything is out of control. Hold their feet to the fire. Why do you think that pulling the gun out of the holster and shooting your foot is the answer?

I am for lowering fuel consumption and finding alternative fuels and even alternative types of transportation, but my business relies on trucks to move heavy items. Not every one works in an office. Someone with a truck built that office building or home that you work out of. Incidentally, I have already cut my fuel consumption by approx. 2/3 in the past 2 years. You can control demand only so much then you have to shut down. Is that what you want to do? Shut down America. Some are so ticked at our president that they are not thinking right. Get out of your city and see the rest of the nation. It is a big country and a great country and we are not perfect, but we are good people doing our best and the thugs are among us, but we can get past that garbage and regain common sense.

Mike

In addition to the effects of speculation, which most good analysts credit with adding $20-35 per barrel to the current price, we also have the very large issue of the percentage of demand that is coming from developing economies — especially India and China. It is growth in oil consumption by these countries that has kept speculator interest in the oil market alive in the face of decreased demand in the U.S. and what looks like a recession here (which would normally spark a sharp selloff in futures). While there’s not much we can do about demand growth elsewhere, I agree with you that we ought at least to try the virtues of controlling domestic demand.

Curt

@Infomom – I like the idea of a scooter, but I’m not so excited about the safety. I’d like to see some ultra small cars that basically use a scooter engine, but have some type of frame to add protection. The smart cars are kind of along the lines of what I think I’d like.

Six years ago I bought a Vespa ET-4. I now use that for as many trips as I can (which is any trip that doesn’t involve ferrying large objects). Even using premium gas I’ve never paid more than $6 to fill the tank. Contrast that with $60+ to fill up the car I otherwise would be driving. A scooter might not be practical for everyday use in some climates, but out here it’s ideal, and we see more and more of them on the road as time goes by.

If an oil speculator comes to the conclusion that the supply of oil is going to decrease dramatically 3 months from now and buys a whole bunch of oil futures on that basis, the price of oil will go up – REGARDLESS of whether or not that belief is true. The speculator will eat a big loss if the supply actually goes up or demand decreases.

Furthermore, while the bottom will drop out eventually, even if there is no change in ACTUAL supply and demand, a futures market can maintain a sustained period of price increases if speculators buy futures on the belief that the price will go up, which causes the price to go up (increased demand for futures), which leads to more belief that the price will go up, and so on.

@Carl – They might decide to reduce output. However right now, they are pretty much at their maximum production, so they couldn’t increase production significantly even if they wanted to. People like to blame OPEC, but demand is so high right now that OPEC isn’t really doing anything to control the output.

As long as demand remains high, OPEC can stay together because everyone is making a lot of money. If the price goes down, countries will start breaking from OPEC because they will want to sell more oil than what OPEC says they can sell. I can’t find the reference but I believe this happened in the late 80s.

In fact having high prices right now is likely to make it harder to keep OPEC together if demand goes down. Countries become addicted to the oil cashflow. If demand goes down significantly and OPEC tells everyone to cut their output by 50% there is likely to be a few countries who decide they want to bring in more money by selling more oil regardless of what OPEC says. Once one country does this others are likely to follow.

The point is that if you can do everything you need to do, not be inconvenienced, and use 1 gallon less per week, you can help drive the price down. If we artificially drive the price down for a few months and make demand go up, we will end up with higher prices–even if it is lower for a few weeks.