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Politics : Foreign Affairs Discussion Group -- Ignore unavailable to you. Want to Upgrade?

To: Hawkmoon who wrote (133134)	5/15/2004 4:19:06 PM
From: quehubo	Respond to of 281500

You are overestimating the impact of the SPR fill. We have put in 59 million barrels of oil in 52 weeks. eia.doe.gov The world consumes 80 million barrels per day, with the USA taking 1/4 of that. What people dont understand is that when commodities are sensed to be scarce a premium is placed to ensure delivery. Presently gasoline, natural gas, coal and crude oil are i short supply both inventory and production/demand wise. The world as you know it is changing the 4.5 billion people on the planet who consume 1/10 of what we do in the West want their share too. Lowering crude prices wont necessarily lower gasoline prices. The bottle neck is the refineries. Besides present prices are not high compared to the 1980's. But we will see prices in real terms escalate over the next few years to higher levels than thought possible. Oil is priced at $41 because of the USD, transportation, scarcity of supply and war risk premium. But how much each of the factors is at play is unknown. OPEC just said they were going to raise production and prices went up over $41 from $38! Did you miss what has happened. The markets saw the data from the IEA and the EIA showing that OPEC is close to full capacity now during the low demand period of oil in the 2QTR.