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Strategies & Market Trends : The Epic American Credit and Bond Bubble Laboratory
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To: carranza2 who wrote (34527)6/17/2005 11:53:16 AM
From: Wyätt Gwyön  Read Replies (1) of 110194
 
It may be strained, but it seems unlikely to have altogether evaporated

back in the first oil shock of the early 70s, spare capacity was over 20% of global demand. today, it is around 1-2%. so, there is basically no buffer in the event of supply disruption. even this spare capacity will be eliminated if the EIA's prediction of 86 mmbpd in 4Q comes true. it's very hard to meet 86 mmbpd of demand on 82 mmbpd of output.

the world has never faced a total elimination of spare capacity since WWII, so i think it can be said that it's "different this time".
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