Wednesday, Apr 12, 2006 at 15:12
Hi Snowy
Certainly food for thought, although the article doesn't suggest it will happen next year.
I don't want to stand in support or otherwise of the views presented in the book. However, in relation to your points.
I think it is a simplistic argument to say that oil company executives talk up the supply fears simply to bolster profits. In fact, as argued in the article, they are doing exactly the opposite and not talking about the supply concern and are spending money trying to quash the notion. Lest they might cause the price of oil to push to higher levels prematurely.
China may well slow down their pace of GDP growth, however that rate of growth will remain extremely high. The demand for energy from China will not diminish and in fact will only grow. The arguments that could be put forward in support of this will
bore must to tears if expanded in this
forum.
I'll accept your view on the oil rigs, but the point of the argument that is being used is the cost of exploration in these 'unexplored' areas will push the price of a barrel of oil through the roof in any case.
But one critical factor that stands out to me is that there has been a lack of investment in new oil refineries around trhe world. This in itself is why the price of the refined product (petrol) is pushing higher constantly. Sure, the price of oil is a major contributor, but that aside if there is a shortage of refining capacity globally that in itself will push petrol prices higher. The bigger message (or question) to take away from that is surely if demand for refined oil products is going to increase substantially over the next few years why isn't anyone willing to commit to the capital cost of new refineries?
Regards
Landie
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