Alex_G

Cheap Crude: A Flash in the (Oil) Pan

I hate to say it, and people will jump on me for it, but the obvious solution is to raise Federal gas and diesel taxes. A lot. This does 2 very important things:

1) Provides much needed money for mass transit and infrastucture projects and

2) Helps keep demand down in the US, which uses 25% of the worlds oil output, mostly for transportation, which will keep oil prices much lower than they would be otherwise.

I would much rather have the money flowing to the Treasury in the form of fuel taxes than to the middle east in the form of higher fuel prices.

Because this would be such a regressive tax, maybe we could use the extra tax money to stretch out the 15 and 25% tax rates.

Still an Oil Bull, Lame or Not

X15,

This drop in gasoline IS demand destruction. Miles driven has fallen as much as gas usage. There has been no time for American drivers to switch to smaller and more efficient cars. Europeans already have those cars on the road, and their gas usage is down substantially as well.

Still an Oil Bull, Lame or Not

I have read dozens of articles about the price of oil, and they mention peak oil, demand destruction, geopolitical forces, etc, but no one mentions the obvious:

At what price does oil become economically unviable??

If fuel goes from 30% of airline costs to 60%, will people fly as much? The cancellation of 8% of current flights says no.

80 to 100 $ oil started the demand destruction that caused the 1 billion people that use the most oil to use 10% less oil for transportation, thus proving that a large percentage of oil will not be bought at any price.

Doubling of gasoline prices would make the extra cost of a CNG duel fuel car pay for itself in less than a year for most people.

This leads me to believe that $250 in current dollars won't happen.

Hayward and Butler Comment on Speculation in Oil Markets

Jcrash, just to back you up, this chart was in the Seattle PI on Tuesday, seattlepi.nwsource.com... , showing a DROP OF 40% in daily regular gas sales in the state of Washington from May '07 to May '08. If that isn't demand destruction, I don't know what is. Looks like $4 gas is the tipping point.