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Tuesday, September 19, 2006

More Oil Speculation

Now the oil speculation is centered on when OPEC will meet and agree to cut production to support prices. Reuters:
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.

Hello, Mama. In some pervese way I was hoping that Crude Oil would stay up around $80 a barrel. That price would force us to find alternative sources of energy, and send the Arab countries back to the Middle Ages where they came from. I spent several years working in London, and saw with disgust the Saudi Princes Drinking and Whore chasing. Funny how they act off the leash. I guess those arabs weren't Muslim
Now I don't feel quite as bad. My worst fear is that they'll let it go down to $45 in order to stop the wave of nuclear plants and other alternatives. Anyone who has ever seen the growth in domestic US supply in the wake of the 70's oil shock knows what a threat our productivity can be, if released.

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.
Hah. As for the Saudis in London, spoiled rich brats are the same no matter the culture or the religion. They even act badly in their own country. Read Arab News.
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