08/13/2008 05:12 am ET Updated May 25, 2011

Where's That Tipping Point? When Oil Prices Return, Will Consumers?

What's up with oil? Here's the prevailing argument: Higher prices finally checked economic growth and spurred changes in driving habits, the famous "tipping points" when Americans burn the SUV and finally try to learn the local bus schedule. That demand destruction explains why oil has fallen from a record high of $147 to $118 and counting, analysts say, meaning we were completely wrong about this.

So here's the question: Now that oil prices are heading for double digits, could those tipping points be reversed?

Oil has already fallen 20% in less than a month. Compared with $4.11 gasoline, the $3.88 nationwide average now looks almost refreshing. Hybrid sales are down compared with last year (though a lot of people blame that on supply woes.) People are crunching numbers to see if it really makes sense to move from the suburbs and get pricier real estate downtown just to save a few bucks on gasoline.

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