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Gold/Mining/Energy : Gold Price Monitor -- Ignore unavailable to you. Want to Upgrade?

To: Eashoa' M'sheekha who wrote (49943)	3/2/2000 7:40:00 PM
From: Hawkmoon	Read Replies (1) \| Respond to of 116763

The cut back was necessary to ensure they receive a fair return for an ever dwindling resource Hmmm... how do you define "fair return"? The average cost for producing a barrel of oil is widely perceived to be $12/barrel, hence the shock waves that were felt when nations were selling oil for under the cost of production (generally in Venezuela $9/barrel for heavy crude and the UK at around $12 if memory serves correctly). So now oil producing nations are generating a 150% markup over and above their average COP per barrel. And in the Persian Gulf, production costs are, I recall, substantially less than average. I would accept 100% mark-up over cost of production as a fair price. I could even accept $25/barrel... but it gets a bit ridiculous when these nations get so greedy that they decide to extort blood money from us. After all, it's not like the money we pay for that oil actually gets redistributed to the common people to any large degree. It is controlled by the corrupt aristocracy and Arab sheiks who WE ARE KEEPING IN POWER with our support. Hmm... now what was that you were saying about a fair price? Who determines that? The uneducated peasants? Regards, Ron

To: Eashoa' M'sheekha who wrote (49943)	3/2/2000 11:28:00 PM
From: Greg Jung	Read Replies (3) \| Respond to of 116763

Taurus33, please avoid such a "shouting" type of post ... it is very painful to read. Some thoughts of my own fwiw: Oil is definitely in a supply-driven price inflation that may have been exacerbated with added demand. Decreased demand in U.S. due to simple economics would normally occur, but we have high employment and high consumer confidence and will still pay whatever it takes. In other countries where demand would normally be affected, the relative cost of the commodity is much lower to the end product (gasoline costs $3+ a gallon because of taxes) so only in U.S. is there significant chance of demand dropping; we are soaked in the greenspan greenbacks oozing from the wazoo at the Hudson River outlet, so nothing happens. Supply would normally pick up to take advantage of high prices but experience has shown that OPEC can flood the other producers away from the business, so oil producers are reluctant to start up again. Otherwise with some restraint by opec during competitive periods we might see an uneasy equilibrium, maybe in the $17 - $24 range. As economically vital as oil is, it is the ultimate commodity and should be the final arbiter of currency valuation. We just saw our currency devalued when the price of oil is $30 instead of $20. All the other items of inflation will follow. But gold can stay where it is, because it is economically irrelevant.