On Tue, 22 Jan 2008 16:40:22 -0500, "Eisboch" wrote:


Oil fell below 90 bucks/barrel today on concerns of a economic slowdown,
according to the "experts".
So, if I understand correctly:

Rising oil prices generates economic concern.
Economic concern influences oil prices to be lowered.



Eisboch

As with many things in life, it seems self regulating and should reach
an equilibrium between oil prices and economic concern. Moral of the
story may be that we should be more concerned if we want lower oil
prices ;-)

Seriously, oil is VERY supply/demand sensitive and an economic
downturn will reduce demand. I also assume that there is a feeling out
there that OPEC will turn up the volume a little to drop prices just
enough to keep us sucking as hard as we can at their tit and will try
to keep their dollar based investments from going even further to ****
while keeping up oil revenues. All of which drives the equilibrium
between oil prices and economic concern ;-)

On Wed, 23 Jan 2008 08:48:49 -0500, Dave Hall wrote:

I also assume that there is a feeling out
there that OPEC will turn up the volume a little to drop prices

The ability of producers to "turn up the volume" is becoming
increasingly more limited. The Saudi's are already pumping at a rate
that is causing long term damage to their oil fields. Iraq's output
is way down from pre-war levels and may never come back to what it
was. Iran, Venezuela and Nigeria have serious issues with political
stability. Mexico is pumping at or near capacity.

Canadian oil sands have a lot of potential capacity but only with big
environmental impacts and production process issues. Undeveloped
Alaskan capacity is a relative drop in the bucket.