Falklands : $200 Crude is Not Upon Us
Submitted by Falkland Islands News Network (Juanita Brock) 06.01.2009 (Article Archived on 20.01.2009)
It is understandable that people could think they are saving money at the pump nowadays and that savings could be played on the stock market or even put into a savings account. However, if fear mongers are to get their way people will be in the poor house instead of having fuel at reasonable prices.
$200.00 CRUDE IS NOT UPON US
By J. Brock (FINN)
It is understandable that people could think they are saving money at the pump nowadays and that savings could be played on the stock market or even put into a savings account. However, if fear mongers are to get their way people will be in the poor house instead of having fuel at reasonable prices.
With the economy and people’s jobs on the line they would have us keep our houses cold in the winter and spend savings on fuel – all going through the roof or the exhaust pipe.
Truth is they have forgotten that demand is the key to crude prices and, with people still unable to afford a full tank it can only diminish when prices rise.
The oil industry has made a fortune that can be spent on exploration and production. Better still they can release funding to maintain their infrastructure and to replace obsolete equipment, methods and techniques.
Though more nations that own oil companies threaten blocking outside access to their oil fields, this has not become a trend in countries that need expertise and infrastructure – outside investment – to get an oil industry going.
Yes, the world will recover from the recession but it is hoped that more of us will be wise by using alternative energy. There will be higher demand but with the modern world comes the internet and those who would alert the oil companies to pump more in time to meet that demand. Having learned the lesson of price and demand, I don’t think traders and speculators would want the responsibility of increasing prices too quickly and throwing us all back into recession.
$200 Crude – remember that threat? I doubt if we will all be millionaires or trillionaires after a world-wide recession. $4.11 gasoline will ensure the alternative energy people will get a bigger slice of the energy action.
To say that fuel prices could spike as soon as next year, perhaps in 2011 or 2012 is simply asking for it. People will not buy gasoline or heating fuel if they cannot afford it. And, jacking up the price just after coming out of a deep recession will only lessen demand as people who had struggled to afford fuel once again find it too expensive.
Agreed, oil giants are cutting back and being scrupulous with the bottom line. That’s what anyone does after having made a lot of money. Exploration cash will be spent more wisely but this doesn’t mean that crude isn’t available in vast commercial quantities in parts of the world that are not as politically sensitive as the mid-east.
I would say that a tight rig market has more influence on exploratory drilling than companies not willing to put exploration dollars where their mouth is.
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