Oil - Black Gold, Texas 'T'
Well, the heading says, Oil supply 'cannot match demand' but then they have this interesting bon mot buried within: "Nowhere near all of the apparently increased demand is connected with increased consumption."
Countries are stockpiling oil, which is the demand the title refers to.
Many are upset at the absence of strict CAFE regulations, but would it in fact keep oil prices down? I'm not sure it would. Last year China was responsible for 55% of the world's concrete consumption despite having only 20% of world population. In other words, China is going to start devouring oil bigtime and that is going to dwarf the oil savings of CAFE regulations.
Even if we stopped buying oil from the Middle East, it wouldn't affect the Saudis. We'd simply buy from a middleman like Mexico. Mexico would buy more from Saudis to sell to us in a regular 3-card monty game. As O'Reilly would say, "Where am I going wrong?"
No doubt fuel prices are a big drag on the economy, but I don't think fuel prices haven't outpaced inflation since the 70s, so we certainly due for this. Obviously there's no inherent right to reasonably priced oil, so we'll have to just take our lumps with $2 - $2.50 per gallon and hope the economy can weather the new reality.
We'll have to eventually get off the oil drug, but it seems like the way that would happen would be for gas to go to $3 or $4 a gallon, which would be highly motivating to say the least. At that point we'll start looking at alternatives -- but by that time it'll be too late, since the economy will be in shambles.
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