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Re: OIL AGAIN!

Bingo!

There's plenty of oil in a physical sense, but what many have been concerned about for quite some time is that cheap supplies are running out.

So we have a somewhat interesting situation. One one hand there's plenty of supply available. On the other, it is available only at prices which hamper the economy. And if we do get prices down, then that will be because demand (ie the economy) fell in a heap such that we don't actually need the new supplies anyway.

Looking at the broader economic situation it is somewhat alarming. Even though most Western economies have struggled (at best) in recent years, there is still practically no spare oil production capacity and we still have high prices.

Just imagine what would have happened if the economy had been growing more strongly? (In my opinion such an outcome is impractical since the resultant oil price spike would have promptly whacked the economy back down again).

I can see that there's a benefit for the US to have expensive domestic production rather than expensive imports. But it's still expensive oil no matter how you look at it. Oil is still uncompetitive for anything other than transport fuels and chemicals, to the point that in most countries non-transport use is fairly limited these days whereas it used to be major.

So we'll have oil. Just not cheap oil.