<On XYZ <<... is too expensive [meaning higher-priced that the long run marginal cost of production of ... or competing products]>>
... Substitute any of "Housing", "Platinum", "QCOM", ... for XYZ, read sentence, and reflect on its meaning.>
Hmmm. Good point Jay [apart from the typo of that instead of than]. That must be why I'm parked with a Tonka truckload of USD waiting for something to do with it.
I did advise you to short QCOM at $42 and $44. It then dropped 25%. I have still not backed up my Tonka truck and swapped the USD for more QCOM so I obviously don't think it's such a great bargain and is more expensive than the long run marginal blah blah blah.
Re the use of production, it's oil industry jargon. Exploration is finding and production is a lot of hard work involving a LOT of expense. Of course the manufacturing process is done by tectonic subduction and cooking of marine biomass deposits, but there's more to production than the collection and cooking processes.
I don't recall saying oil will be USD 2/barrel, though the production cost for Saudi oil is about there, even with the inflationary pixelation process run by Uncle Al KBE.
These days, in financial relativity shrunken dollars, I guess something like US$20 is a more likely bottom, subject of course to the outcome of Year of the Feather Duster manoeuvres, H5N1 and any bonus events such as a bolide splash down over the Pacific ocean and other fractal extremes, which do happen. Not forgetting the possibility of a derivatives-powered financial implosion which would create a LOT of fun for everyone.
There are swarms of energy sources at much cheaper than 4 - 7 times the current price of oil. Heck, even ElM's Brazilian ethanol is selling like hot cakes at current prices. Coal production is booming. Noocular reactors are getting a new lease on life. Wind farms are fun. Insulation de rigeur. And, of course, phragmented photon cyberspace replaces nearly everything. The oil age will not end for lack of oil. People will just move on.
Mqurice |
