LilBob

Offshore Drilling Isn't the Answer - Supply and Demand Is

One thing that can't be ignored about oil is that although you can quibble about the exact price where US consumers start to change their behaviors, it's undeniable at at some point between 3.85 and 4 dollars a gallon for unleaded regular people start looking for ways to reduce their energy consumption. OPEC's report on Wednesday cited a variety of factors that are expected to reduce demand for oil in 2009, most notably that projected demand growth is less than projected supply growth.

As of 3 pm today oil temporarily dipped below $130/barrel, and it's likely that by the end of July US consumers will see unleaded regular pump prices below 4 dollars a gallon. What remains to be seen is if US consumption spikes once a public that's been price conditioned to accept 4 dollar a gallon gas sees a relatively significant dip in unit cost.