Author Topic: Economic outlook: Oil prices cloud recovery hopes; FT.com  (Read 1452 times)

Offline swanson

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Economic outlook: Oil prices cloud recovery hopes; FT.com
« on: August 10, 2009, 05:33:19 AM »
Economic outlook: Oil prices cloud recovery hopes

http://www.ft.com/cms/s/0/e5c33c42-84c8-11de-9a64-00144feabdc0.html?nclick_check=1

By Chris Flood
Published: August 9 2009 10:59 | Last updated: August 9 2009 10:59

The nascent recovery in global economic activity could yet be derailed by rising oil prices, with Brent crude hitting $76 a barrel last week, its highest levels of the year to date.

In a blunt warning last week, Goldman Sachs called for a co-ordinated policy response to resolve the problems of commodity shortages, noting: “Although the financial crisis had been addressed, the commodity crisis has not.”



"This post has been modified by Docwatmo to comply with DMCA Rules and Regulations".
« Last Edit: September 08, 2010, 09:19:58 PM by Docwatmo »

Offline LdMorgan

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Re: Economic outlook: Oil prices cloud recovery hopes; FT.com
« Reply #1 on: August 10, 2009, 03:05:51 PM »
Interesting that the price of oil can rise when there is a glut on the market, and demand is sharply down because so many manufacturers have shut down and are no longer buying electricity, fuel, plastics, or oil as a primary ingredient of their own products.

And of course, the price of gas can stay high when the price of oil drops like a stone...

Back in '72, at the height of the Arab Oil Embargo, the husband of one of my wife's friends was an oil-tanker captain. He sailed a shipload of oil down the length of the Eastern Seaboard  and up the Mississipi River, hitting every single oil storage depot along the way. He couldn't find anywhere to unload. Every single oil storage facility was full to capacity.

They weren't sending the oil on to the refineries because the gas shortage was an engineered event.

When the time was ripe (and the politics) the oil got refined, and the American consumers got their gasoline at a forever-inflated price.








nkawtg

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Re: Economic outlook: Oil prices cloud recovery hopes; FT.com
« Reply #2 on: January 04, 2011, 05:13:41 PM »
Oil price ‘threat to recovery’
Headline sounds familiar, well here it is again.
http://www.ft.com/cms/s/0/056db69c-1836-11e0-88c9-00144feab49a.html#axzz1A78zBbJ6

What isn't being said is why, and it's not about supply.
The price of oil is linked to the dollar, so when there is an unchecked increase in the money supply, ala the Feds, the oil producing countries have to hike their prices to compensate for a lower dollar.


metaforge

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Re: Economic outlook: Oil prices cloud recovery hopes; FT.com
« Reply #3 on: January 10, 2011, 06:14:04 PM »
What isn't being said is why, and it's not about supply.
The price of oil is linked to the dollar, so when there is an unchecked increase in the money supply, ala the Feds, the oil producing countries have to hike their prices to compensate for a lower dollar.

So sure are you that it's not about supply?  I guess we'll see.... pressure is mounting on OPEC to increase production.  Let's see if they can... let's see if that 4-5mbpd production spare capacity really exists.  My guess is it doesn't.  I read elsewhere US demand is now back up to 20mbpd.

I do agree that the devalued dollar is certainly another major cause of price increase.  I just think it's too early to rule out supply (production) as a culprit as well.