“No, most of this is consumption based. Demand has dropped like a rock. “
My guess would be that consumption is not off more than 5%. 10 at the most...
Here’s the data;
For the weeks ending Oct. 3 and Oct. 10, for example, gasoline sales were down 9.5 percent and 9.7 percent, respectively, compared with the same weeks in 2007.
But a MasterCard Advisors report released Tuesday showed that in the last two weeks, with pump prices falling, consumption of gasoline was down only 6.4 percent in each week compared with the same weeks of 2007.
5-10% at the margin on a commodity is a lot. The downward pressure also forced those on margin (hedge funds, groups hedging, etc) to sell even if they didn’t want to.
Everyone is entitled to a WAG now and then.
But the actual demand dropped 2.3% the last four weeks.http://paguntaka.org/2008/11/06/crude-oil-prices-slide-on-worries-about-weaker-demand/
When supplies are very tight, a small decrease in demand will have a fairly large impact. I would say that demand has had a fairly strong impact on price, as well as the dollar exchange rate. Although I'm not ruling out market manipulation either. Bambi's got some friends in the middle east.
All I know is that prior to the housing bust, just in my area, there were several hundred crews a day working on homes - often three or four vehicles per crew. Plus you had cement trucks, all other types of heavy equipment, inspectors, salespeople, buyers and everyone else involved right down to the port-o-johns. Now that it's dried up, I can count on one hand the total number of crews working in any one subdivision around me.