In the U.S., high prices are finally beginning to reduce demand: gas prices, for example, have finally fallen back to levels seen five years ago, and eventually prices should force conservation of other oil-based products, too.
Although the US is still the world’s biggest oil consumer (by a mile), world oil consumption is still growing.
The International Energy Agency (IEA) expects world energy demand to grow by 1% next year. For 2008, the IEA previously cut their estimate to less than 1% growth in demand for oil. The IEA not only blamed lackluster supply of oil for the sky-high prices, but pointed the finger at refinery capacity
If current oil prices are supported by supply and demand fundamentals (and only a fool would believe they aren’t to some degree), it looks like you can expect $4-5 gas next year, too.
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