To: LLCF who wrote (1857 ) 5/26/2003 12:14:35 AM From: John Madarasz Read Replies (2) | Respond to Yes...good point..DR. FABER: I think, if you look at China and compare it to the economic development to South Korea between 1965 and 1980 or Japan between 1950 and 1975, you will find that in the case of the economic development of Japan and South Korea, the per capita consumption of all commodities increased very rapidly as economic development progressed and as standard of living increased. In the case of Japan and South Korea, the per capita consumption of oil, went from roughly one barrel to around 17 barrels per annum in the phase of economic development, which lasted around 30 years. In the case of China today, the per capita consumption of oil is still around one barrel. This is compared to the United States, which has a per capita consumption of 22 barrels of oil. In the US you consume twenty times more oil per capita than China. Now I don’t think in China you will go to that kind of consumption levels. I think you can go to the level of Latin America, which is around four barrels. And for the whole of Asia we have now a daily consumption of 19 million barrels, compared to the US consumption of 22 million barrels. The US consumption is ten times higher than the whole of Asia. If we go up to the level of Latin America, we would be consuming something like 35-45 million barrels a day. I think on an oil market, which is today, total production around 78 million barrels, would drive prices higher in the long run. I cannot judge what prices will do if there is or isn’t an Iraqi war. I am convinced that the oil price will go up very substantially financialsense.com
