The Real Reason Behind Oil Price Rises - An Interview with James Hamilton

``World oil production was basically stagnant between 2005 and 2008, even though world GDP was up 17%.  With economic growth like that you'd normally expect increased demand, particularly from the rapidly growing emerging economies, and in fact China did increase its consumption by a million barrels a day over these 3 years.  But with no more oil being produced, that meant that the rest of us-- the U.S., Europe, Japan-- had to reduce our consumption.  It took a pretty big price run-up before that happened.  To those claiming the price is too high, I would ask, how high do you think the price had to go to persuade Americans to reduce oil consumption by a million barrels a day?''