Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Politics : Rat's Nest - Chronicles of Collapse -- Ignore unavailable to you. Want to Upgrade?

To: Wharf Rat who wrote (2705)	10/18/2005 10:47:00 PM
From: Wharf Rat	Read Replies (1) \| Respond to of 24225

Energy by Alan Greenspan Remarks by Chairman Alan Greenspan Before the Japan Business Federation, the Japan Chamber of Commerce and Industry, and the Japan Association of Corporate Executives, Tokyo, Japan October 17, 2005 Even before the devastating hurricanes of August and September 2005, world oil markets had been subject to a degree of strain not experienced for a generation. Increased demand and lagging additions to productive capacity had eliminated a significant amount of the slack in world oil markets that had been essential in containing crude oil and product prices between 1985 and 2000. In such tight markets, the shutdown of oil platforms and refineries last month by Hurricanes Katrina and Rita was an accident waiting to happen. In their aftermath, prices of crude oil worldwide moved sharply higher, and with refineries stressed by a shortage of capacity, margins for refined products in the United States roughly doubled. Prices of natural gas soared as well. Oil prices had been persistently edging higher since 2002 as increases in global oil consumption progressively absorbed the buffer of several million barrels a day in excess capacity that stood between production and demand. Any pickup in consumption or shortfall in production for a commodity as price inelastic in the short run as oil was bound to be immediately reflected in a spike in prices. Such a price spike effectively represented a tax that drained purchasing power from oil consumers. Although the global economic expansion appears to have been on a reasonably firm path through the summer months, the recent surge in energy prices will undoubtedly be a drag from now on. In the United States, Japan, and elsewhere, the effect on growth would have been greater had oil not declined in importance as an input to world economic activity since the 1970s. full text... energybulletin.net