Oil demand is down

But prices keep rising

Gas prices have been steadily rising. In the U.S., they’ve hit over $2.60 a gallon, from $1.60 late last year. The price of oil has more than doubled in that period, to nearly $70 a barrel. The rise is mystifying to many observers. Oil demand is still weak and there is plenty of supply. Compared to last year, global demand is down 2.6 million barrels a day. Some analysts blame rising prices on the investments that are being poured into oil stocks and futures. The bad news is that these rising  prices are dampening any of the modest recoveries in consumer spending, as people pay more and more to fill up their vehicles.  At the very least, the trend will keep the pressure on the auto industry to keep building smaller, more fuel efficient cars.

NYTimes