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Strategies & Market Trends : The Epic American Credit and Bond Bubble Laboratory

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To: mishedlo who wrote (20114)	10/17/2004 10:24:42 PM
From: Wyätt Gwyön	of 110194

Not sure about the price of oil. Too many factors but it would probably go down to the extent that it is used in plastics, etc. about 7% of oil consumption is for petrochemicals. the vast majority of consumption is for transportation, which is where you see the biggest demand decline in an economic slowdown. however, some of the demand decline is not really a decline. if you look at China, the decline is really in the rate of growth. this contrasts to a place like the US, where you could easily have an outright decline in a recession. but production at existing fields is declining some 4% annually, so without sufficient production adds, even in an economic downturn (short of depression), demand might not decline rapidly enough compared to supply shrinkage to forestall further price increases.

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