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Strategies & Market Trends : ahhaha's ahs -- Ignore unavailable to you. Want to Upgrade?

To: kormac who wrote (5634)	11/23/2002 2:43:17 PM
From: ahhaha	Read Replies (2) \| Respond to of 24758

During the course of military action, global oil prices would jump sharply and then enter a deep and prolonged spiral, should the United States win the war and establish control over the Iraqi oil industry -- I don't agree. Oil might jump superficially and briefly, but that's all assuming a nuclear weapon isn't ignited around the main Persian Gulf oil center in Saudi Arabia and Kuwait. The US wouldn't control Iraqi oil and it wouldn't be constrained. Further, any disruption in Iraqi oil output would be quickly replaced by all those non-OPEC and OPEC producers. which likely would mean soaring production levels. There's no reason for this either. The producers can cut back on output to current levels. Russian oil production is already at maximum levels, meaning that domestic energy companies would not be able to boost production significantly enough to take advantage of higher prices. False. Marginal output was maximum at a given lifting cost about six months ago. Russia has shut in vast fields just like Saudi Arabia. In Russia's shut-in fields the lifting cost isn't economic at current world demand at less than $35. In order to benefit from a temporary wartime price hike, they would have to increase exports by diminishing sales to Russian customers. False. Although growing Russia's oil consumption is way below its output. The problem there is more one of gasoline refinery capacity. Moreover, the prices of Russian gasoline and other refined products would skyrocket with the increased global price. Why? The author implies inelastic price relative to crude, but anyone knows that isn't true. The author assumes gasoline-oil inelasticity and asserts oil prices would rise and then rapidly fall, so gasoline would fall proportionately. So if crude's rise and fall is brief, so will gasoline's, and that has little economic effect. Even the more probable scenario of a fairly rapid U.S. victory will not allow Moscow to breathe easily. U.S. control over the Iraqi oil industry would be a likely, if unintended, consequence of military victory and would lead to much higher production levels from Iraq. Why? Also, the US wouldn't control Iraq's oil industry. This is narrow minded one dimensional linear thinking. This is integral to Washington's strategic interest: decreasing global oil prices to levels that would allow a sustained U.S. economic recovery. I won't even read the rest of this drivel. This is 'crat left wing rabble rousing political hysteria. Don't post this kind of third grade crap on my thread.