High oil prices eroding demand

Soaring gasoline prices in the United States are beginning to erode demand for the fuel, cooling the American love affair with gas-guzzlers and pushing travelers toward public transportation and even bicycles.

U.S. fuel demand has fallen nearly 3% below last year's levels. Total oil products demand over the past four weeks averaged 19.9 million barrels per day, or 2.9% less than the same period last year, according to the Energy Information Administration.

The declines in fuel demand are playing out in the auto industry. SUV and truck sales for big U.S. automakers Ford and GM slumped in September while Japanese carmakers posted big gains in the U.S. market with their smaller vehicles.

- Looks like between supply disruptions, high prices and collapsing SUV sales, demand destruction for oil is starting to kick in. You could say, oil demand is inelastic - until it becomes a pain in the wallet.

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