Dollars and Jens
Thursday, May 06, 2004
Oil outlook
This oil piece plays up the possibility of political turmoil in Saudi Arabia, on the grounds that not only do the Saudis produce 8 million bbl of oil per day, but they also have better capacity than most countries to pick up the slack if supply drops off elsewhere. What might be more important, though, is that this excess capacity only amounts to 3 million bbl/day, against an 80 million bbl/day -- and growing -- global demand. Other regions may also have some excess capacity, but from what I understand, not much.

If demand for energy keeps growing, it will either have to find a substitute, or prices will keep going up, or both. The right answer in this sort of economic problem is almost always "both".

Det är cross-posted.

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