OT, RE: oil and gas prices
There's not going to be any relief until at least spring, barring a pretty major recession. There just isn't enough investment in the industry to generate the necessary capacity increases. Also, OPEC really doesn't have any spare capacity, and thus they are left trying to jawbone the market down. As our Fed chairman can tell you, jawboning markets doesn't work so well.
Ordinarily, in this kind of market, exploration and production companies would be expanding their budgets big time. Cognizant of what happened to them over the past two decades when they tried that, though, there really isn't any aggressive exploration going on right now. My guess is that it will take steady prices at current levels until next summer. At that point, we may start to see some capacity expansion.
In the meantime, that won't help anyone this winter. There is a significant risk of very large spikes in the price of crude oil and natural gas. If Gore wins the presidency, as I expect, don't be surprised if you start to hear talk about re-regulating the price of natural gas à la the 1970's. It won't work any better now than it did then, but it won't stop Gore from trying. There will be too many howls for the government to 'do something'. |
