Consumption is down already.
Indeed, it was down before this price spike started happening.

Explain to me how your plan works when the laws of supply and demand clearly are not in force.

It is not our (US) consumption that only matters. It is worldwide consumption. Part of the rising fuel prices is caused by increased usage due to the industrialization of China and India. The only way a US reduction of demand would lower prices is if the rest of the world doesn't take up the supply our reduction creates. But lower prices would lead to increased usage since more uses would become profitable.

This is the same reason that when Chavez threatens to stop selling oil to the US no one worries. The only way he can impact prices or supply in the US is by reducing Venezuela's petroleum output to the world market, which means he has to forego the revenue that output would produce.

As far as rationing, you need to calculate the reduction in the GDP from decreased economic activity. A nice way to prolong the recession?

like jeff said we use about 30-40 million barrels in one day...thats ALOT of fuel..

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Not for 303,878,352 people, it's not.
Well, actually, it's more now. Updates are available here.

Yeah, but then we'd have to call it Canadian bacon, Eh?.

I know, but you didn't say "Eh?"

(Sigh) Rookies....

Also, petroleum is shipped by pipeline. All the gasoline, let's say, is the same until it reaches the local fuel dealer. It is at that location, that the special additives particular to the brand are added. All that would happen is that less Exxon/Mobil brand additives will be mixed and more additives for the stations to whom the sales have migrated will be used.

Only way to lower the price of a commodity is for their to be a total market drop in demand.

The answer depends on where it's coming from and where it's going.

Oil from the Arab Gulf takes about six weeks in transit to either US refineries or Japanese/Chinese ones.

You also need to factor in what sort of lag that oil will meet at the refinery, what sort of lag the refinery will meet in getting product into the pipeline, how long it takes distributors to get the finished product (gas + additives) to the gas station.

If the oil's coming from Mexico or Canada (the two largest suppliers to the US), figure a couple of weeks from well-head to refinery (pipelines are usually faster than super-tankers), then add all the other factors.

I, too, believe that speculation is responsible for a good chunk of current gasoline prices. Hedging bets (but always with an upward trend) is the safest strategy for dealing with the unknowns that could happen during the period between pumping the oil and getting it to the gas pump.

The answer depends on where it's coming from and where it's going.

Oil from the Arab Gulf takes about six weeks in transit to either US refineries or Japanese/Chinese ones.

You also need to factor in what sort of lag that oil will meet at the refinery, what sort of lag the refinery will meed in getting product into the pipeline, how long it takes distributors to get the finished product (gas + additives) to the gas station.

If the oil's coming from Mexico or Canada (the two largest suppliers to the US), figure a couple of weeks from well-head to refinery (pipelines are usually faster than super-tankers), then add all the other factors.

I, too, believe that speculation is responsible for a good chunk of current gasoline prices. Hedging bets (but always with an upward trend) is the safest strategy for dealing with the unknowns that could happen during the period between pumping the oil and getting it to the gas pump.

Here's the thing; The plan suggested in the reoccurring spam might actully have a short term effect, was this high price business actually responding to the laws of supply and demand. It's not. In fact, the prices started going up BEFORE consumption dropped. More, we actually have more supply than we've had in years, and still the prices remain strong.

How long does it take for oil to get from the ground to the pump? There's always a lag between suppy/demand and prices, so is it possible all we're seeing here is that the price of oil is responding slowly to the change in supply/demand?

The fact that the prices went up before demand went down may indicate that the price was reacting to the previously high demand, not that the drop in demand was reacting to the increase in price.

There may be a "bubble" of sorts here, especially with speculators, just like with the mortgage market. People assumed that the demand for oil would only go up, so they speculated on higher oil prices. If that is true, then we're likely to see that extra supply start scaring speculators, and work to decrease the price. I'm not sure what the strategic petroleum reserve would do here, other than provide an eye-opener to the current supply increase.