While waiting to find out how many million barrels of daily oil production OPEC says it will cut, it’s a good time to review the financial-energy situation as the two are now inextricably linked.
For weeks now the stock markets and commodity prices have been falling. Oil is currently trading around $76 a barrel which is close to a 50 percent drop since the middle of July.
We are witnessing one of the most eventful weeks in modern history. Stocks and oil prices plunged on Monday and bounced on Tuesday; credit markets seem to be freezing; the Congress remains in gridlock as members watch the approaching elections fearful of what could happen to their incumbency.
For those who aren’t ready to buy into the concept of world oil production going into decline in the next few years, there is a less worrisome subset making the rounds known as “peak oil lite.”
“We’re trying to come to grips with the end of a 20-year secular credit expansion that went parabolic in the last six years,” the chief North American economist for Merrill Lynch said on national TV yesterday.
As world oil production has never peaked before, there is no historical basis for making informed judgments as to what is going to happen.
Last week the Saudis called a meeting of oil producers and consumers at Jiddah on the Red Sea for June 22. The immediate reason for the call was a one-day jump of $11 in the price of oil to a new high of nearly $140 a barrel. This increase was […]
The situation is not good. Our average gasoline price just climbed past $4 a gallon and all indications are that it will continue to rise. After Goldman-Sachs made headlines by telling us that oil is going to $150 or maybe $200 a barrel in six months or maybe two years, […]
The evidence is mounting that the U.S. might just encounter the first real crisis of the oil depletion age before the year is out.
Fuel prices alone are unlikely to bring America to its senses.