Thursday, September 15, 2005

Gasoline Demand Freefall

Occasionally I like to do an "I told you so" post, especially if I can rub some salt in to the wounds of my blog partner's (stc) husband (aka English Bubba). Back on August 13 I made the prediction that a recession is on the way and it will be triggered by high gas prices. OK I will admit that there is no proof that we are yet in a recession, and to compound things, Hurricane Katrina may have sped up the timetable, but clearly as James Hamilton notes, gasoline demand in the US has taken a huge hit in a couple weeks - a trend that started before Katrina hit. Of course my friend English Bubba will state that all bets are off because of the extreme effects of Katrina. However, the price of oil today is approximately the same as it was before the storm, and as JDH also notes, the wholesale price of gasoline has also dropped to pre-Katrina levels. What do you have to say now EB?

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