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Friday, September 15, 2006

Economic Principles Work Again

US oil demand growth for the first half of 2006 went down from 1.2 million barrels a day to 1.1 million barrels per day. In other words, with the price of gas so high, people have reduced their consumption. Do you mean to tell me that as the price of something rises, the demand decreases? That's crazy!

And as the price for oil increased, people found it profitable to seek alternative sources of oil (like in deeper waters) that were unprofitable at lower per gallon prices. Imagine that.

These Adam Smith guys may be onto something.

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