posted on Aug, 21 2005 @ 11:13 PM
As I understand the oil problem, and I have done
enough reading and research on it that oil has
been my largest stock holding over the last five
years or more it boils down to this:
Demand is outstripping supply and that is not
likely to change unless demand decreases. Supply
is dwindling and any new supply will probably
not equal the oncoming demand. Since demand
has to decrease to effect this supply/demand,
a good guess is that demand will decrease at
some point when the price rises enough to
knock out demand enough to make supply greater
than demand. So far, the price rise has not
choked off enough demand and it looks to be
As it rises eventually this will choke off
enough demand and the price will back off.
I suspect the point is still in the future.
If I had to pull a figure out of the air,
I would guess that demand should slack off
as oil gets into the $80 to $100 area.
Whenever it does back off, I suspect that
demand will increase and pretty quickly
put a new floor under it and then it
might gradually increase until such point
as new energy technologies come on stream.
I think people betting on presidential
elections to fix it are going to be disappointed.
I believe the market is going to set the price.
Politicians are not going to be able to control