World Affairs Brief, June 13, 2008. Commentary and Insights on a Troubled World.
Copyright Joel Skousen. Partial quotations with attribution permitted. Cite source as Joel Skousen’s World Affairs Brief
OIL PRICES: MARKET AND MANIPULATIVE FORCES AT WORK
The price of oil and gasoline continues to rocket upward even as demand for gasoline wanes. Miles driven by American motorists have actually dropped over 4% compared to last year. High gasoline prices are having their effect and there is still a lot more cost cutting to come as people scramble to buy more fuel efficient vehicles. Overall, demand for oil is increasing, but the rate of increase is slowing, even in China and India where the masses are finally now beginning to have access to personal vehicles. Sadly, the budding personal car movement in third world countries is about to be snuffed out as rising prices threaten to dampen demand for all but the wealthy. There are definitely some pernicious, non free-market forces at work here as the demand curve for oil is nowhere near as steep as the rising price of oil. This week I’ll help you analyze what is happening.