"Bill McKee" wrote in message
k.net...

"Doug Kanter" wrote in message
...
The confusion began here when you said consumers would not buy fuel
efficient vehicles until this that or the other thing happened. I pointed
out that these vehicles exist and are selling nicely already. This is not
an absolute statement, since it should be obvious that MORE of these
vehicles will be sold as fuel prices increase, and as the current crop of
still-useful vehicles ages and needs replacement.

It did NOT disagree with anything you said in your last paragraph
beginning with "I can't figure out...". One exception, though: Oil prices
are largely disconnected from supply and demand. If you believe
otherwise, you are not familiar with how daily prices are REALLY pegged
by speculators. The price increases of the past 12 months are wildly out
of proportion to changes in supply & demand.

The prices are in line with the growth in demand. That is what drives the
futures market. Huge change in demand from China. All those
manufacturing jobs that went there require energy to run the factory.
Melt the scrap iron, make the plastics, and run the screw guns that put
the items together. Commodity markets are a bet on the availability of the
commodity. And the commodity: Oil has not become more available and the
refinery capacity has not increased. Good bet on the future price. The
other thing that drives the price is the underpriced oil that has been
supplied for the last 10 years or so. I think it was Southwest Airlines
that locked in oil at $25 barrel for 10 years or so. That is expiring,
but the traders have to make up that money some how. And they shift that
loss to the new contracts.


Do you think China's demand has increased proportionately to the rise in gas
prices over the past 12 months? I have dinner on the grill, so I don't have
time to go looking for stats, but I'll guess "no".