dhavis

Oil: Demand Destruction Overdone?

Nice analysis. I think when you look back and even at current numbers you might come to the conclusion that oil/gas demand is not being destroyed. But when you factor in that SUV sales have all but stopped and that small car sales have ramped up so much that manufacturers can't keep up with demand, then extraolate that out, you might get a better understanding of what is to come. This happened in the late 70's and early 80's, it takes many months or years to truly show up in the numbers. Also, a lot of the cutbacks airlines have made in routes and planes have not taken effect. It is a phasing out approach, not an axe it now approach. As for global demand, I have not studied it, but I would assume they are less likely to be able to absorb the impact of high oil/gas than those in the US. Subsadies of foreign nations have only been in effect for a month or two, give it time to take effect. Demand will fall.