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

To: SiouxPal who wrote (3837)	4/7/2006 7:06:05 PM
From: Wharf Rat	Read Replies (1) \| Respond to of 24213

OK. Thanks for sharing that with us.

To: SiouxPal who wrote (3837)	4/7/2006 7:06:17 PM
From: Wharf Rat	Read Replies (1) \| Respond to of 24213

Nice recovery from a duplicate post... Kaboom: Peak copper, superspike prices, oil and US debt Jerome a Paris, Daily Kos This chart, representing oil prices, you're probably familiar with by now... This one, for gold, you've probably heard about... But how about aluminium? ... and copper? ... See a pattern? Prices going inexorably up and up? What's up with that? ...Let's summarise: strong underlying demand growth from a buoyant world economy (expressed, in this case, in decreasing stocks rather than increased apparent demand); producers unwilling or unable to produce more, and faced with increasing production costs; short term disruptions like weather events or strikes that cause major price volatility; financial investors reinforcing the trends in the expectation of more to come. Sounds familiar? It is. The above 4 points are absolutely true for oil, and it seems that the same dynamics are at play. The interesting thing to note, once again, is the difficulty for supply to go up. There are objective factors (energy prices, the slow internalisation of environmental costs, and the depletino of the best reserves), and there are the "political" factors (a reluctance to increase production, as it could bring prices down and make the additional investments unprofitable). What we see confirmed, once again, is the deadly combination of increasing demand and the inexorable increase in the marginal cost of the resources, leading to massive price increases. The era of cheap commodities seems to be truly over. (7 April 2006) UPDATE. Related story from Schlumberger: OPEC Warns High Commodity Prices May Kill Oil Projects PARIS - Soaring commodity and raw material prices are increasing the cost of oil and gas projects by up to three times, Organization of Petroleum Exporting Countries ministers said Friday. dailykos.com