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To: BradtotheBone

What price would you pay to drive to work before you sold your house to move or quit your job?

Oil demand tends to be very inelastic in the short term.

Which is why we saw the 2008 price spike of $145.

It won’t stay that high, no way, but he is suggesting the spike could be that high.


14 posted on 01/21/2015 10:18:58 AM PST by thackney (life is fragile, handle with prayer)
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To: thackney
It won’t stay that high, no way, but he is suggesting the spike could be that high.

It will likely spike at a new high because the dollar will be worth less (again).

The vehicle demographic will have shifted (back) toward larger and less economical vehicles because they will be cheaper to drive in the interim.

The supply of used vehicles from the 'boom' will be (at least from looking around these parts) fleet pickups (4WD 4-door, 1/2 to 1 ton), Suburbans, Escalades, and large SUVs, and not a few heavy trucks (mainly semi tractors).

When you weigh the price break versus fuel consumption for a good used vehicle, the larger vehicle can win handily, even when fuel prices are high. It depends on driving conditions and what the buyer wants.

Not all areas of the country are burdened with emissions checks and the like, so there will remain a good market. (Air quality issues vary locally depending on terrain and population density. Minot, ND is a totally different situation from Denver or L.A.)

39 posted on 01/21/2015 2:50:32 PM PST by Smokin' Joe (How often God must weep at humans' folly. Stand fast. God knows what He is doing.)
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