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To: John Pitera who wrote (12093)	8/18/2000 11:39:43 AM
From: pater tenebrarum	Read Replies (1) \| Respond to of 436258

John, yes, the Euro will be helped by a narrowing of the rate differential, especially as a huge Euro carry trade has been put on, similar to the Yen carry trade of old. as to the article on oil, methinks the Saudis, if push comes to shove, will try to preserve OPEC's unity above all. i don't think they will go it alone with output increases if the remainder of OPEC is set against such a move. what's more, lately some doubts have been raised regarding the size of their spare capacity. the doubt stems from the low quality (high sulphur content) of the oil recently shipped from Saudi Arabia. usually that suggests that they're scraping at the bottom of the barrel already. finally, it seems that the worlds big oil tanker capacity is maxed out already as well. since it is impossible to add to that capacity willy-nilly in the short term, it may not really matter if production is indeed increased: the oil still needs to be shipped. if the synchronization of global economic growth stays intact, the daily crude oil deficit will reach over 2 million barrels next year, even if OPEC produces at maximum capacity. interestingly, non-OPEC production has actually declined over the past year, as more and more large fields (especially in the North Sea), being past their production peak, see their output falling. Norway's production capacity is set to decline sharply in coming years. the oil based economy is doomed in the long run.