Hoarding is exactly what the government is doing right now by filling the SPR, and frankly it's the best thing that could happen. It drives prices up. High prices encourage demand destruction. They also finance new well development. The hoarded oil gives us a buffer to fall back on once shortages become more prevalent. High prices are what we need in order to adapt to what's coming, and the sooner they happen, the better.
Posted: Tue May 03, 2005 2:38 am Post subject: Yet another oil price forecast
Quote:
Escalating demand for crude in the China Rim region-comprising China and 18 surrounding countries-will outstrip supply over the next 5-50 years and precipitate a crisis of “economic imbalances, energy insecurities, ancient hatreds, and unsettled scores” that could threaten world peace, said researchers at Laguna Research Partners LLC, Irvine, Calif.
“Based on our analysis of the intense economic, crude oil, and military confrontations developing among the China Rim region’s largest economies, we believe that the most aggressive crude oil price targets calling for $100/bbl within the next 3 years will prove to be conservative,” they said in an Apr. 14 report.
They also warned, “At worst, this competition could deteriorate into armed conflict.” Laguna Research Partners analysts quoted a June 2004 US Department of Defense report that China’s People’s Liberation Army is on “an ambitious, long-term military modernization effort to develop capabilities to fight and win short-duration, high-intensity conflicts along its periphery.” China’s economic rise is creating the “war chest” to finance the modernization of its army as the “ultimate guarantor of China’s energy security,” the analysts said.
Read the rest from Oil and Gas Journal's latest edition.
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