Tuesday, September 19, 2006
More Oil Speculation
U.S. light crude settled down $2.14 to $61.66 a barrel, the lowest in nearly six months. London Brent fell $1.88 cents to $62.17 a barrel.
...several OPEC ministers have said they favor of a price of between $50 and $60 a barrel. The price for OPEC's basket of crudes was about $57 a barrel Tuesday.
"At some point OPEC will have to step up to the plate and say what price they'll want to defend," said Bill O'Grady, analyst at A.G. Edwards. Producer group OPEC has been pumping oil at its highest rate since the late 1970s.
The only way I can see for us to fend off the problem with housing values is to launch into a new wave of domestic productivity, and energy is the natural candidate. Producing much more energy domestically would also help to correct our current account imbalance.
The reason I feel so badly about thinking this way is that high energy costs are the most regressive and inflationary costs possible.
I'm all for nuclear plants, windmills, solar and anything else that will work. It would be wonderful if we could get public policy changes that would encourage these steps even through a potential plunge in oil prices. David of Photon Courier has suggested government guarantees of certain price floors. I think he has a great idea. I would much rather see that than spending money to subsidize only certain technologies that may not work, such as ethanol.
Links to this post: