Most of the concern about oil has focused on the huge consumption in the US and rising needs for crude in countries like China and India. Many theories say that producers like Saudi Arabia and Kuwait have ample reserves but do not want to part with them because they want to keep prices high.
The assumptions on supply may be off by a significant margin. Global oil think tank International Energy Agency "is preparing a sharp downward revision of its oil-supply forecast," according to The Wall Street Journal. The agency also said it is concerned that some OPEC countries are not investing in new drilling.
This put oil prices in the middle of the worst of all worlds. Demand is up. Supply is down. Exploration is slowing.
The news shows how important it is for countries like the US to turn to old sources, especially nuclear and coal, as well as new options like ethanol and solar.
Oil will hit $200. It is just a question of when.
Douglas A. McIntyre is an editor at 247wallst.com.
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Reader Comments (Page 1 of 1)
5-22-2008 @ 10:09AM
Kent said...
I wholeheartedly agree with this article. Coal plagued with outmoded conceptions needs to have a re-look. Revive Germany's WWII technology converting coal into gasoline through hydrogenation is one approach.