To: VisionsOfSugarplums who wrote (8468 ) 9/20/2001 11:37:23 AM From: SofaSpud Read Replies (1) | Respond to Good points, tw. A couple of thoughts. It's been suggested that one of the reasons that prices have remained firm is that China has increased it's demand for imported oil by a significant amount. That's helped keep the pressure off OPEC. OPEC unity tends to flag when their revenues decline, as it's easier to wrap your head around the cash flow implications of cheating on your quota than reducing production and hoping that reduced supply will increase prices. Now, if you look at the latest trade figs, they're dismal. Japan's imports declined a further 3.6% in August. How much of that hits China, and therefore feeds into Chinese oil demand? U.S. trade declined an annualized 18% during the first half of this year -- what are the implications of that for oil demand? I would suggest that we will shortly see an oil-demand environment that will give OPEC unity its biggest challenge since the cuts in March '99. Will they be up to it? If the world economy is tanking as badly as some of these trade figures suggest, I rather doubt it. We may well see $10 oil before we see $30, subject of course to military developments.
