No hurricane, yet oil closes in on all time high

Friedman is a very bright man but he doesnt know everything. His outsourcing pro nafta view onhow great this is for the US isnt quite holding up.

.

only the beginning:

June's contract which is already much more heavily traded than the May contract that ends its trading period on Friday:

End of the world as we know it. Get the suicide pills ready (shades of "On The Beach" by Neville Shute, without the nukes).

How many Gen-Y folks are ready to do without a whooooole lot of conveniences?

Thank you, Clinton.

Thank you, Bush.

Thank you, Generation X.

On top of this oil disaster, Thanks to Bush, jr. this country will not have a peace time for a very, very long time.

YEEEE HAWWWWW!!!!!

What if a hurricane hit Iran?

they don't get hurricanes there

dust storms, Oh yeah

Gen- Y'er wrote:

Thank you, Clinton.

Thank you, Bush.

Thank you, Generation X.

Thanks yourself. If the price of gas is such a problem for you, don't drive a motor vehicle. Take public transportation or ride a bike or walk/run. If you notice, people will bitch and moan about $3 a gallon gas, but apparently it doesn't bother them enough to really do something about it and change their habits. They would rather blame the president and other people's fuel consumption habits.

as someone who travels around the midwest quite a lot for work - usually by car - i can add a little bit of anecdotal evidence to Californian's assertion. i don't see a lessening of traffic; i don't see less cars in the parking lots of shopping malls; i see just as many people filling up at the gas stations. i've talked to the owners/operators of gas stations and they tell me that demand isn't slacking. people, in my opinion, are clearly doing one of two things: cutting spending on other things so as to not change their driving habits or they're not cutting back anywhere. if i recall, conventional wisdom has been that $3/gallon for an extended period of time would change people's driving habits. i'm not so sure if that will be the case.

Are you talking?

I'd prefer you apologize and be on your way.

Low Pressure wrote:

they don't get hurricanes there

Earthquakes too.

Yup, and now NUCLEAR ENRICHMENT FACILITIES.

Oh boy.

"May you live in interesting times" Ancient Roman curse

The problem is, in the short term, the demand for gas is not very elastic. It takes years for people to replace their SUVs with fuel-efficient Honda Civics, either move closer to work or get a new job closer to home, and for companies to decide it's more economical to decentralize manufacturing/distribution and locate closer to markets.

Until then, people still need to get to work and companies still need their goods to truck to market. So demand isn't going to plummet in the short term unless the price increase is incredible. Prices for goods will just increase.

Over a number of years, however, demand-per-capita WILL decrease. I certainly don't drive when I don't have to and try to combine trips I used to not think twice about...but I still have to get to work every day.

AH wrote:

It takes years for people to replace their SUVs with fuel-efficient Honda Civics, either move closer to work or get a new job closer to home, and for companies to decide it's more economical to decentralize manufacturing/distribution and locate closer to markets.

And these people have made what specific changes in response to the high gas prices from the early 1980s? How many years will it take for most folks?

Asterix wrote:

AH wrote:

It takes years for people to replace their SUVs with fuel-efficient Honda Civics, either move closer to work or get a new job closer to home, and for companies to decide it's more economical to decentralize manufacturing/distribution and locate closer to markets.

And these people have made what specific changes in response to the high gas prices from the early 1980s? How many years will it take for most folks?

People did make major changes in their driving habits. Automakers began making much smaller and more fuel efficient cars. Gas prices started spiking in late 1973 and peaked in 1981. People did eventually change their habits but it took almost a decade. Growth in demand for gas slowed, and oil prices fell dramatically in the mid 80s, from almost $40 a barrel in 1982 to $10 a barrel in 1986. From then until around 2004, gas was very cheap (with the exception of about 6 months around the Gulf War/Conflict in 1990/91 and a spike in 2000/01). After almost 2 decades of cheap gas, people changed their habits again and auto makers put out larger and less fuel efficent cars. It has only been about 2 years that we've had oil over $40 a barrel and gas prices consistently above $2 a gallon at the pump. Give it time. If prices persist at current levels, we will see changes in habits and conservation similar to the early/mid 1980s. But it will take several years, if not longer. Its a gradual process.

Californian got it. The gas spike in the 70s spelled the end to the real American muscle cars. The Japanese cars exploded on the scene with their small size and took market share. Cars like the Chevy Chevette and Plymouth Horizon saw success and sold in large numbers. It wasn't until the 90s that people began to think they needed a Tahoe or Expedition to commute 45 min each direction.

I can't say 100% for sure because I don't have the numbers, but I have heard that SUV sales have already seen a big decline in the last 6 months. I can say that as soon as gas started getting around $3.00 last year, the inventory overflow lots around some of the truck plants in Detroit began to fill up with unsold vehicles. I personally know quite a few people who have sold or are selling their SUVs and planning to replace them with sedans or minivans.