Re: Oil Price Rise Has not Affected Demand.
- From: "Gman" <pgorman5@xxxxxxxxxxxxxx>
- Date: Sun, 17 Jul 2005 16:59:17 GMT
"Robert" <RB@..> wrote in message
news:2lk9d1tk0slbr4ve564trvnc7krkgolrek@xxxxxxxxxx
> So much for economic theory....
>
> The price of oil has doubled in a six months. The demand has INCREASED
> steadily.
>
> How high does the price have to go before people start throwing away their
> big
> cars?
>
People won't throw away the big SUVs that they just bought or trade them in
yet, but hybrid car sales are increasing and large SUV sales are decreasing.
Even if everyone was convinced that they needed a more efficient car today,
it would still take at least a decade for the transition to take place.
Consistent price above $2 a gallon was the first psychological barrier where
now people have realized the era of cheap fuel is over. Each dollar increase
per gallon will ratchet the concern up a notch. I think it will take
somewhere in the neighborhood of $5 a gallon to make nearly everyone
consider fuel efficiency and change their lifestyle. It happened during the
gas shortages in the late 70's - it will happen again.
.
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