long term price of oil, page-4

Looking back on figures for China 1st half 2008 -

Gasoline consumption up 16.2%
Diesel up 14.7%
Kero up 6.6%

Something has to fuel their 10.4% GDP growth. The idea of raising the domestic price on fuel in China was to increase supply, as refiners were losing money and creating shortages.

If we are at US$120 bbl, there is more liklihood of supply disruption than demand destruction. Economists talk about oil as though it was wheat.

Oil reserves are the key. Any oil producer (like CVN) will be in the position where increases in the price of crude will place greater increasing value on their remaining resource than the diminishing effect from depletion.

We are along way from demand destruction, more a state of wishful delusion.