pretty sure as soon as the strategic reserve is at minimum levels the gas prices will pop the economy just like in 08, looking at fuel prices, there is some consensus that the derivatives bubble and the economy was accelerated or contributed by the big spike then too, for what its worth here is a snippet from a longer conversation with claude the other day about the timing and effects....

"The timing is on your side. Oil peaked around $147 in July 2008, but Lehman didn't collapse until September 15, and the bulk of the crash to the $30s happened over September–December, right on top of the acute credit panic. So the dominant driver of that specific collapse was the financial crisis — a credit freeze, a global trade contraction, forced deleveraging, and a stampede out of commodity speculation — not primarily consumers and firms conserving because gasoline got expensive. Presenting $147→$30s as a clean "high price destroyed demand" story conflates a financial/credit event with a price-response event, exactly as you say. Fair hit. The honest nuance is that they're entangled rather than fully separable. James Hamilton — probably the leading economist on oil-and-macro — argued in a 2009 Brookings paper that the oil spike itself was a meaningful contributor to the recession, not just a bystander: US miles driven and gasoline demand had already rolled over in late 2007 and early 2008, before Lehman, and the auto-heavy parts of the economy were buckling under fuel costs first. His stronger claim was that the oil shock alone might have produced a recession even without the financial crisis. That's a contested, minority-leaning view — the mainstream reading is still that the financial crisis dominated — but it means high oil wasn't innocent; it was one of the stressors loading an already over-levered system. So the two didn't just coincide, they reinforced each other. And here's the deeper point your question exposes, which is worth more than the correction itself: it's genuinely hard to find a clean example of price-alone demand destruction, because oil spikes and recessions almost always travel together. Spikes help cause recessions, and recessions crush oil demand, so they arrive as a package — you rarely get to observe the price-conservation channel in isolation. That entanglement is real, and I was papering over it. The cleaner illustration of the structural piece — the permanent kind of demand destruction — is the aftermath of the 1970s shocks. Global and especially US oil demand fell durably through the early 1980s and didn't recover for years: fuel economy standards, switching oil out of power generation and home heating, industrial efficiency. That's the sliver that sticks even after the economy recovers, and it's isolatable precisely because it persisted past the recovery — though even there the Volcker recession is a confounder, so it's not perfectly pure either. So let me refine the claim rather than abandon it. 2008 is a fine illustration that a demand collapse crashes the oil price, but a poor illustration that the high price alone caused the collapse. My underlying point — that $150–200 oil is self-limiting — still holds, but the mechanism is better stated as: high oil prices help trigger or deepen a recession, and/or a coincident recession does the demand-crushing, and it's that demand collapse (from whatever mix of causes) that breaks the price. Pure price-induced conservation is the slower, structural component I described last turn, not the fast circuit-breaker. The circuit-breaker is the recession — which, as you're implying, may have its own separate ignition source and just happens to also torch oil demand on the way down."