[Sunnyflorida]

You simple need to understand marginal effects. Strongly suggest a trip to the library. The gap is only big if you live in a purely linear world.

The question is: can oil go to $262. The answer is: only if it does not matter.

What the people on this thread are saying is that you CANNOT use two dimensional analysis. As the price goes up there is more supply. Who said, "at $262 people will turn cats and dogs into gasoline."

Just look at katrina, The threat of a very small disruption jacked prices more than the loss of supply. The threat of a few million barrels from the Strategic reserve adjusted prices downward.

Energy markets are complex. You do not need to replace 100% of the imported oil to create energy independence. You only need the threat of marginal supply. What is that margin? Looks to me like it is a lot less than most people think. Katrina was an interesting experience.

[M. Dodge Thomas]

What the people on this thread are saying is that you CANNOT use two dimensional analysis. As the price goes up there is more supply. Who said, "at $262 people will turn cats and dogs into gasoline."

Note to self:

"Two dimensional analysis SO twentieth century... get with the new paradigm and stop paying attention to the non-instaninaitous nature of the transformation of cats and dogs into refined petroleum - $250 oil would be short-term (decades, max) event, meanwhile, THINK OUTSDIE THE BOX... does US really for example need scheduled commerical air transport? ... handful of people who really need to fly can just charter a jet at 10x current costs, meanwhile rest drive if they can afford gas until canine liquefaction infrastructure comes on line."