Maybe, they're not importing BMWs because they're buying Skodas ...
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I thought it took a long time to get rid of that Yukos fella and move everything into friendly Putian hands. Isn't Russia going to sell lots of gas now that the $$$ is flowing through the right accounts.
When oil was $45, I thought $25 oil was about the right price. Once it went above $50, I was waiting for the blow off. Katrina provided it for the SUV crowd and other oily cost increases (ie pop bottles) are just now being realized.
Haven't we already crossed the divide of higher costs leading to greater supply? Aren't we now heading back ... into the abis. My best guess is that we just drift around (ie trade in $50 - $60 range) until a solid breakout sets a new pattern. Given the possible events of today, a breakout event could drive prices much higher or back to the $35 range. Whatever happens, I suspect "the event" will be a critical matter and possibly be of greater significance then 911. Maybe the Chinese (or Koreans) will buy Qualcomm or, maybe Osama will turn San Diego, San Jose or Seattle into waste lands. Who knows?
At $25, tar sands technology is barely economical and new pipelines are much harder to capitalize. The O&G industry has never done a good job exploring and building infrastructure (or at least reporting publicly about their findings and building efforts). I expect the industry will have serious troubles adjusting back to the good old days where cash flow dictated capital availability.
As in the seventies, the dynamics of O&G have changed. Most of the today's new players probably won't be around in five years. We're already well into consolidation. Doesn't that mean the greedy phase is coming to an end?
Your estimate of a 3 to 4 year timeframe for change is most interesting. Is that long enuff? Didn't it take 10 years (and Reagan) to revert the 70's upcycle. In 3 years, a new US President will be installed; Iraq will have moved onto whatever ... civil war, passion of the people, same old/same old; China, India and Russia may have formed "quality" alliances with their new commercial partners.
North American and European standards of living are going to be impacted most severely by the upcoming changes. Possibly, much more negatively than the rest of the world. What will happen with Africa? Cheap resources in moderate demand coupled with a dying populous is a new game of cards. What rises from those ashes?
Overall, worldwide product quality is on the rise. This is a significant change. Given elasticity, it will drive higher prices. However, oil (and resource costs) will once again fall because of increasing supply.
For those on the wrong side of the equations, it will be a double whammie. Higher prices and still no jobs. Just like Japan in the 1990's. It doesn't look good for the western world of our generation.
If folks consider what has happened todate as scary (ie the Walmart/Dell Effects) then they ain't seen nothing yet. Our upbring during the 1960's coupled with the dramatic rise in living standards cultivated the technical innovations of 1984 (1975-2000). The industries of the rust belts died as leaders and were regenerated as followers. It was the leadership of the Japanese who drove commerial success while the US and Europeans innovated. Those innovative "new wares" are now being distributed world wide.
AlQueda folks may have it all wrong. Aren't they also looking into the rear view mirror. Their timing couldn't be worse. Impatience to force matters, is one of the few things going against the natural shifting of the tides in their direction.
We do live in interesting times. Did anyone on SI predict anything close to what has happened in the last five years?
nf
ps Lake Mead Nevada ... most troubling, especially for California !!!
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