Unrest 'could double' oil price
By Ambrose Evans-Pritchard
(Filed: 27/06/2005)

A warning of a possible near doubling in the cost of oil was
issued yesterday as UK prices rose to more than £4 a gallon and the AA
Motoring Trust said the price of diesel was approaching £5 a gallon.

Further rises were expected next week, it said.

The price of crude oil could soon reach $100 a barrel, compared
with the present historic high of $60, if there was further supply
disruption in Russia or a political upset in Saudi Arabia, a leading German
institute said.

The IFW World Economics Institute in Kiel said that any number
of "unwelcome developments" could provoke a crisis. Given that the industry
was already producing at full capacity to meet soaring demand in China and
India, there was almost no margin to absorb a sudden supply shock.

The institute cited the risk of unrest spilling over from Iraq
into Saudi Arabia and urged governments to lower car use, improve public
transport and develop other forms of energy.

Adding to fears, Mahmoud Ahmadinejad, Iran's new hard-ine
leader, called for a crackdown on foreign oil firms.

The concerns of a long-term supply shortage were echoed by the
Centre for Global Energy Studies in London, which questioned whether Opec
could raise production much even if it wanted.

"There is no credible supply-side solution to the problem," the
group's latest report said. "Prices will start to ease only when global oil
demand growth stalls."




http://news.telegraph.co.uk/news/mai.../27/noil27.xml

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"Prices will start to ease only when global oil demand growth stalls."



Global oil demand growth ain't gonna stall any time soon...especially from
China.

The irony of it all is that companies sent manufacturing jobs overseas
because it was cheaper to make stuff over there. But now China's demand for
oil is driving oil prices so high, that our economy will be hurt, and people
*still* won't be able to buy the stuff no matter how cheap it is.