Oil Isn't Cheap Anymore

As gas prices rose over the past couple of years, many experts pointed out that, when adjusted for inflation or seen as a percent of average incomes, gas was still less expensive than historical records. Their views seemed to be backed up by the fact that gas consumption continued to rise. Some experts said that oil would have to reach the unthinkably high price of $134 a barrel before it had the same impact as oil prices in the early 1980s.

Now, with oil prices having crossed the $140-per-barrel mark and gas prices costing more than $4 a gallon, the Wall Street Journal is reporting that people have seriously cut back their gas consumption: they're currently at levels last seen five years ago. Now even the economists can agree that oil isn't cheap anymore.

The high prices are also changing priorities at the major automakers. Today, Toyota announced that it will start to produce its Prius hybrid in the United States to help meet demand for the fuel-efficient vehicle.