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Gold/Mining/Energy : Strictly: Drilling and oil-field services -- Ignore unavailable to you. Want to Upgrade?

To: Razorbak who wrote (62013)	3/12/2000 8:48:00 PM
From: upanddown	Read Replies (2) \| Respond to of 95453

Interesting article in this week's Barron's about oil prices. I'll provide the link but it is subscription. interactive.wsj.com The basic thrust of the column is that current oil prices are not having anywhere near the effect of earlier periods of high prices. A chart shows the annual percentage of gross domestic product (GDP) spent on oil since the first oil shock in 1973. The GDP figures are in current dollars meaning inflation is taken into account. From 1974 to 1985, oil costs averaged over 4% of GDP with a high of 6.5% in 1981. Since the oil price collapse in 1986, oil costs have averaged approx 1.75% of GDP with a high in 1990 of 2.3% and an all-time low of 1% in 1998. Current estimate for 2000 - 2%. It just shows how ridiculous it is to compare 2000 oil prices (OR gas prices at the pump) with 1990, much less 1980. Some excerpts... By February of last year, crude had sunk to a 10-year low of $11 a barrel, but then came roaring back to a high of more than $27 by November. (Last week the price was hovering above $31.) That dramatic reversal of fortune should have lubricated economic growth in the first quarter while denting it in the fourth. But if anything, the very opposite occurred: First-quarter growth in gross domestic product was respectable, but below par, at 3.7%, while the fourth quarter posted an eye-popping 6.9%, the highest rate for any single quarter in more than three years. For example, the rising cost of jet fuel would normally lead to a hike in the price of an airline ticket, but airfares have actually eased a bit over the past couple of months. And just to complete this rosy picture of the energy -- impervious economy, you might also expect that the soaring price at the pump (averaging nearly $1.40 a gallon, versus $1 a year ago) might start to take the edge off the sales of gas-guzzling SUVs. But as Standard & Poor's chief economist, David Wyss, points out, consumer grumbling has so far taken the form of all talk and no action. In fact, General Motors announced last week that sales in the light truck category rose by 20% in February over January's figure. John