Demand for fuel will increase with decrease in price.
Maybe here, but not all over the world. Oil is traded in U.S. dollars, so countries like China and Canada that are out there working to reduce their exchange rates in an attempt to protect their domestic economies may not actually see the lower prices. When the Canadian dollar was strong a few years ago, the price of gasoline in the two countries was very similar. Now that the Canadian dollar is weak, their gasoline prices are still high while U.S. prices are dropping steeply.
“Demand for fuel will increase with decrease in price.”
For the first time in a couple of decades...I’m actually considering the purchase of a large gas-guzzling, carbon-spewing, road-hoarding, planet-killing SUV. That should make a car manufacturer happy, fund an autoworker’s union retirement account and give the truck salesman a +1 mark on the sales board. There’ll be the added bonus of knowing I pissed off an environmentalist and killed a polar bear.
If it was $80-$100/bbl...then yes. But...the current decrease in oil has nothing to do with demand being restrained by costs. Costs are low enough now and the price of oil is not an impeding factor to productivity. What is causing the low price is the glut in surplus (which will only get worse when Iran comes online) and low demand because the world economy stinks...especially China(who's fake building boom is imploding before our eyes)...and oil could be $10/bbl and there would be no increase in demand.