Supply & Deman

As the oil price goes up, people are cutting back. There is a nice article in the NY Times on this, and this very nice graphic:


If you are saying "but that isn't much of a cutback!" and see bigger cutbacks in 1974 and 1980. Just wait! The article points to indications that cuts of 5% or more are coming. Here are the relevant quotes"

But the Federal Highway Administration estimates that in March — the most recent month for which data is available — vehicles traveled 246 billion miles. That is a lot of driving, but the figure is down 4.3 percent from the previous March.

MasterCard SpendingPulse, which samples data from gas stations, reports that on the Friday before Memorial Day the amount of gasoline purchased was 7.6 percent lower than on the Friday before Memorial Day in 2007.