American Conservative Daily Your daily dose of conservative offsets to combat annoying liberal global whining.

• • Home
  • About ACD
  • Interactive Polls
  • Join/Post
  • Media Relations
  • Quick Start
  • T-shirt Straw Poll
  • Terms Of Use
    • Book Reviews (General):
    • Communication/Email
    • Copyright:
    • Email Use Policy:
    • Moderators
    • Posting Comments
    • Responsibility of Authors:
    • Submission of Material:
    • Syndication:
    • Trolling Defined
• Conservative Shop
• RSS

What? Oil Prices Dropping? NO!!!!!!!!!!!

J.J. Jackson* | August 20, 2006 

You can almost here politicians that have for years screwed around with the oil market and prevented us from seeking our own increased oil supplies here in the states Screaming!

NEW YORK (CNNMoney.com) — This morning oil dipped below $70 a barrel for the first time since late June — and prices may ease even further. Indeed, some analysts say that in two years, oil could be trading $20 lower than that.

Crude has already slipped more than 8 percent over the last week, pressured by the alleged plot to blow up airliners over the Atlantic, BP’s decision to keep half its giant Alaska oil field open, and the truce between Israel and Hezbollah.

Most analysts don’t expect oil to fall too much further in the short term, as demand remains strong and uncertainty surrounds supplies from Iran, Nigeria and Venezuela.

But the recent record-high prices have fueled a boom in exploration. And as that boom begins to yield more oil, the industry will gain a greater ability to ramp up production in one place in order to make up for any shortfall elsewhere.

This should reduce the impact of a supply disruption in, say, Iran or Nigeria, and ease what experts refer to as the security premium that’s currently build into oil prices.

“That [premium] is in the neighborhood of $25 dollars a barrel,” said James Williams, an energy economist at the consultancy WTRG Economics. “That number would go away, or most of it would go away, if we had more spare production capacity.” - CNN MONEY

Well, don’t count on it. $40 a barrel is more likely but I would say $45-$50 is more likely still.

It’s simple economics. If you do not increase supply and demand goes up the price goes up. If you increase supply faster than demand does up prices drop.

Of course you will always have futures traders trying to drive prices up to make money but you can minimize that effect by pumping enough oil to meet demand and making sure you have enough capacity to refine it. We are at $70 a barrel oil right now because of over regulation and government interference. And the only way it will come down is with less government meddling. It is that simple.

Basic Economics: A Citizens Guide to the Economy, Revised and Expanded (Book) Authors:Thomas Sowell Manufacturer:Basic Books Released:23 December, 2003

More Liberty Means Less Government: Our Founders Knew This Well (Hoover Institution Press Publication ; No. 453) (Book) Authors:Walter E. Williams Manufacturer:Hoover Institution Press Released:April, 1999

Contributor's website: http://www.libertyreborn.com




*Content posted by a user may not be completely written by that user. Content from another source is cited in either block quotes, with quotes or with a link to the original material. Content from other sites is posted for commentary and news purposes under fair use. Each user is responsible for their own postings and a particular posting should not be construed as being endorsed by this site or it's owner.