I would like to point out that the spike in the price of gasoline has nothing to do with the demand but rather a lot to do with Wall Street speculation betting on the futures of commodities.
Between 2003 and 2008 – the year oil reached $125/baril – the amount of speculative money in oil and other commodities had increased by 2,300%, from $13 billion to $317 billion, thanks in large parts to Goldman Sachs and Hedge Funds in general.
Oil prices finally fell in 09 because Americans started driving less and speculators were forced to withdraw or face bankruptcy, but demand is on the rise again and speculators are back in the game hoarding billions while consumers are paying for it at the pump. The “Enron loophole” that allows electronic traders to buy foreign oil on spec should be closed, government agencies have the power to act and close it – under Dodd-Franck – but are choosing to simply ignore the issue; with oil money flying into campaign pockets in an election year, don’t expect anything to be done anytime soon and don’t take campaign promises for granted on the issue either, they will be lies. The only thing that can successfully lower the price of gasoline is decreased demand.
PS, in 2008, a barrel of oil was traded 27 times on average, before it was actually delivered and consumed.
Update, today in the news:
Oil at $120