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Politics : Ask Michael Burke

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To: Ronald J. Clark who wrote (59298)	5/14/1999 10:18:00 AM
From: Knighty Tin	Read Replies (2) of 132070

Ron, I don't trust artificial shortages. Opec is holding back production to raise prices, but that only works for a short period of time. The incentive to cheat soon becomes overwhelming, and the incentive to be the first to cheat massively is the sweet spot for making your country wealthy in the near term. So, time is working against them. Also, you need demand to expand and it simply is not. With economies outside the US basically in over capacity and dead in the water, there is no ramp up. Higher energy prices won't help kickstart them, either. I think the long term story for oil is great. But, short term, this is a manipulated price rise that won't last more than 6 months.

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