October 1, 2006
IF THEY JUST COULD HAVE PERPETUATED THE ILLUSION FOR THREE MORE MONTHS:
That Falling Feeling As the myth of endless Chinese demand is exposed and heavy investment boosts supply, prices at the pump could plummet further. (Leonardo Maugeri, 1 Oct 2006, Newsweek)
Oct. 9, 2006 issue - Understanding the oil market is difficult. Making reasonable forecasts is almost impossible. That's why most analysts were surprised by the dip in prices from the Aug. 8 historic high of $79 per barrel to below $60 in recent days. Suddenly the alarmists who foresaw an imminent era of oil scarcity are silent, OPEC is again discussing supply cuts, oil share prices are down. And new conspiracy theories are flowing, like the one about the Republicans' pushing down gas prices before the U.S. midterm elections.
In fact, the current oil crisis has nothing to do with a catastrophic shrinking of global oil resources, while the specter of rising Asian demand is largely a myth—China has huge potential to reduce its oil consumption. Supply is tight because two decades of low prices discouraged the exploration and development of new fields in the world's most oil-rich areas. That has cut spare production capacity—the critical cushion needed to cope with crises—to just 2 to 3 percent of global consumption. This makes the price of oil a hostage to political and climatic events. There has been no objective rise in oil-state instability, only in the market's vulnerability to speculation—gloomy or not.The Democrats were that close to walking away with the elections. Posted by Pepys at October 1, 2006 9:03 PM
That is a very good article by Mr. Maugeri. I think he understands the problems better than some operators. The China myths just in the recent past was not at all clear. They were buying heavily on any market where it was available and all indications were that it wouldn't stop. In mid 2005 they experienced the mile long lines at gas stations. Whatever the problems, crude shortage or refinery problems, the indicators were there and it got everyone's attention.
If there's anything to the TradeSports futures, they may walk away with them yet. The prospects for a house GOP hold there have dropped from 58% to 48% since the Foley scandal broke.
Posted by: djs at October 2, 2006 1:49 AMThat Foley business is testimony to gayness of suffering perverts to occupy any position of responsibility. Individuals whose personal lives are disordered are not to be trusted not to carry their disorder over into weightier matters.
Let us not be distracted by the obvious truth that the heterosexually disordered are similarly unreliable. We all have lived through the Clinton years.
Posted by: Lou Gots at October 2, 2006 5:54 AMChina is rather inefficient in its energy use. It burns up roughly twice as much energy per unit GDP compared to the OECD economies. Lots of room for improvement.
Posted by: Gideon at October 2, 2006 6:17 AM