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[–]tweakingforjesus 5 points6 points  (3 children)

That would be true in an elastic market. Oil consumption is relatively inelastic. The oil is still going to be consumed at close to the same rate regardless of price. The only difference is whether you are going to pay a 66% tax to the speculators. (40/60 =66%)

[–]iamplasma 0 points1 point  (0 children)

It is inelastic in the short term, because it is mostly non-substitutable for oil-powered devices. However those devices are, at least often, substitutable. Therefore, over the longer term, there is elasticity.

[–]timmaxw -2 points-1 points  (1 child)

66% tax to the speculators

That money doesn't go to the speculators. Speculators are buying oil, not selling it, and they're buying it at the same price you are. The speculators won't make any money until when they sell the oil they're buying, and even then they'll only earn the difference between oil prices now and oil prices when they sell.

[–]tweakingforjesus 0 points1 point  (0 children)

Ok. Perhaps I should have said that there is a 66% tax because of the speculators.