yes, it is roughly 6 days use, but that isn't the point. We aren't at any one time losing all 85 million barrels for 6 days. Only, at most, 3 million barrels (say Iraq, part of Venezuela, and a severe GOMEX hurricane). My point is that when you view this 3 million in the context of at least 500 million en route, the sysytem is a lot more inherently stable than one would believe listening to some of the doomsayers.

There is usually plenty of time to reroute oil that might have been intended for less-critical usage to the critical points. Temporary price adjustments help facilitate this.

I, for one, don't view Iraq as lost production. If you look at Iraq long-term you'll see what I mean. Iraq was pumping 2 million bpd in 1973. 1973! That is roughly what they pump today. I would use BP's numbers back to 1965, but BP doesn't even list them.

Iraq has always been problematic. Always. They have the second largest conventional reserves after Saudi. They should be pumping at least 6 million barrels per day. Put simply - count on Iraq for nothing in the short term. View them as having a potential upside of 6 mbpd. Prior to our 2003 invasion, the BEST you could say about Iraqi production was that it was erratic and subject to the whims of a single lunatic. Now all of a sudden it is a problem and cause for concern? I don't think so.

There are always going to be disruptions - both on the high and the low side. Look at 1997 and 1998. The fact that the price has remained between $10 and $90 for the last 30 years is a miracle as far as I'm concerned. For starters, $90 is cheap. Call me crazy, but for most of the recent past, the price has been both cheap and stable.

We just saw the highest gas prices ever in the US. Didn't cause many problems, did it? I'm not talking about local severe shortages, I'm talking about average price spread across the nation. People barely blinked.

I know Stuart will disagree, but there is no data to show that $3 gas changed people's behavior. Simply because the phenomenon was too short-lived. Any perceived reaction may have been due to initial shock. A dollar increase in gasoline only translates to $500 for your average driver over the course of a year. The vast majority of Americans would fail a simple quiz on the history of gasoline prices over the past 5 years. They simply have no idea of the capacity of their tanks, their EPA mileage, or anything else related - they only get outraged because they see their local newscaster saying something about it. They spend more everyday on coffee. The people who visit this site are the few who have a clue.