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127 comments on Crude Oil: how high can it go? (19th century whaling as a model for oil depletion and price volatility)

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tonyw on May 16, 2008 - 6:09am Permalink | Subthread | Parent | Comments top

Hi JonFreise,

You say "...at a price of $300...I don't think that price can be sustained for long..." In several European countries we are already paying around USD9 per gallon and this I think represents more than USD300 given the pathetically low US taxes.

At USD9/gallon i do not see a great deal of demand destruction here and sales of gas guzzlers such as Porsche & Mercedes are holding up. In fact revenues at Porsche are increasing:-(

IMHO it will take a significant increase, $200/barrel? to noticeably decrease demand.

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JonFreise on May 16, 2008 - 4:43pm Permalink | Subthread | Parent | Comments top

You have a point about the higher prices per gallon in Europe. But most of that price is tax. And taxes stay in the national economy. In the model I am putting forward, most of the value will be leaving the local economy. However, your point is still valid if the price of oil payed out circulates back in some manner.

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ondrejch on May 17, 2008 - 2:13am Permalink | Subthread | Parent | Comments top

or if you print fresh new money to buy that oil from a thin air...

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