Tuesday, June 12, 2007

Oil Prices: the difference a week (weak?) makes

A week ago: We will drive "oil prices through the roof" if you persist in the development of bio-fuels.

Today: The story is of the recovery of oil prices from a huge selloff on Friday.

If OPEC wants to delay the development of cost-effective bio-fuels it should expand production, not contract it. Conversely, if bio-fuels become more likely to be competitive in the future, we would predict oil prices to fall today.

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3 Comments:

Blogger Camille said...

I cannot agree more, and as a former Saudi oil minister said: "the stone age did'nt end because we ran out of stones" ... only because we found alternative tools to stone... Iron!
Cheers

3:59 PM  
Anonymous Anonymous said...

The key thing is that as envisioned by the Bush Administration, the use of biofuels will most likely _increase_ the need for petroleum-based products, since it is so completely based on corn-derived ethanol (and most reputable studies show that biofuels derived from corn are amazingly dependent on petrol products). Although this is wildly popular among corn-state senators in the U.S. Congress, it makes no sense at all... except in that strange other-world called the Bush Administration.

3:03 AM  
Blogger John B. Chilton said...

anonymous,

I didn't have bio-fuels in mind.

And I completely agree bio-fuels are nonsense and have said so many times on this blog.

3:20 AM  

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