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Gold/Mining/Energy : Oil & Gas Price Economics
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To: excardog who wrote (252)9/10/2000 2:03:58 PM
From: Mark Adams  Read Replies (1) of 350
 
I'm also concerned about the possible longer term implications of high energy prices. Especially their impact on SE Asia and Europe. The US is part of a global system, and if higher energy prices hurt locally, they probably will hurt our trading partners too.

I suspect that if they created a recession, we might see some deflation. That would make cash and interest bearing instruments the place to be.

I don't understand NG pricing impacting fertilizer- though I do see how Oil does. Fertilizer requires nitrogen- which isn't part of NG as I understand it. Maybe the substituion of Oil for NG in power generation would drive the cost of Oil (an input into plastics and fertilizer as I understand it) higher.

I'm not very familiar with the distillation process and the possible outputs for a given barrel of oil- so I may be hosed when it comes to understanding the longer term ramifications of sustained higher pricing. This may be a clue for us to work with- what can a barrel of oil produce?

If higher prices are sustained, I do think that we will see an improved economic basis ten years hence, as industry and individuals adapt to a more energy sensitive posture. (read: conservation may be a long term benefit of short term pain)

In the short term- sustained higher oil prices may resolve themselves should they throw the economic engine out of sync.

I welcome your comments and suggestions along these lines of thought.
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