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Politics : View from the Center and Left -- Ignore unavailable to you. Want to Upgrade?

To: Katelew who wrote (85154)	9/17/2008 4:56:11 PM
From: TimF	Read Replies (1) \| Respond to of 541997

World demand for oil has been growing at about 1.6% annually in recent years. World use of oil has been growing at 1.6% annually. That's not the same as world demand for oil. Use, or if you want "quantity demanded" goes down as the price goes up. Demand can be expressed in dollars, but then you have to deal with the changes in currency, and you can't just substitute Euros, or Yen, because they also fluctuate in value. But in any of those currency spending on oil has gone up a lot more than 1.6%. You could also consider demand changes to be neither quantity used, nor money spent, but how much would be demanded if the price didn't change at all, but that's largely a guess. Also note I said "maybe much less than 10%", yes I know I was very unspecific, and properly so. Hard specific data on such things just doesn't exist, and probably can't. In any case, the simple fact is that except perhaps over very long time frames oil tends to be inelastic. Perhaps it takes a 2% increase in demand to double the price, perhaps it takes a 60% increase depending on what time frame your talking about and on many other factors. But it will almost always be less than a doubling of demand to double the price. Price going up by a percentage that VASTLY exceeds the increase in quantity demanded (or the increase in any other measure of demand) isn't evidence of any sort of odd market manipulation, or anything unsavory or unusual.