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2005-04-24 Home Front: Economy

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Posted by Steve White 2005-04-24 00:00:00 AM|| || Front Page|| [11133 views since 2007-05-07] Top

#1 Global demand is expected to average more than 84 million barrels a day in 2005, while spare output capacity is believed to be about 1.5 million barrels a day, most of it in Saudi Arabia. This is a particularly ignorant piece of reporting. What is relevant to the spare capacity is the rate of increase in demand, not the average over some arbitrary period. The latest figures I could find shows production in February was 84.2 mbpd. Demand is increasing at between 2.5% and 3.5% per annum. So the increase in demand this year alone is around twice the spare capacity. We run out of supply before the end of 2005. What happens then? The oil price rockets and economies crash (bringing demand back down). There will no global economic growth until significant alternate energy sources are brought online, i.e. nuclear, at least 5 years. No growth for years or even worse growth concentrated in China and a few other places in Asia and prolonged contraction especially in Europe will bring severe social disruption. Terrorism causing supply disruptions merely makes it happen a few months sooner.

If anyone has an alternate scenario, I'd be interested in hearing it.

Posted by phil_b 2005-04-24 5:53:36 PM|| 2005-04-24 5:53:36 PM|| Front Page Top

#2 Why would economic growth continue in China but not the US? Energy input per unit GNP is lower in the US isn't it? Meaning to say, the US is in a better position to buy 80 bucks a barrel oil than China is.

Posted by Shipman 2005-04-24 6:08:42 PM|| 2005-04-24 6:08:42 PM|| Front Page Top

#3 You can think of oil as a tax on economic activity that is applied everywhere. Like any tax, its effect is to depress the level of whatever is taxed more or less equally. China is growing at 10%+ pa, the USA 3to4%. Europe 1to2%. So China's economic activity has to be depressed by much more than Europe's to go into recession. The USA is between the two. Although once a major and coordinated recession starts other factors come into play, like debt levels and quality, which may be more of a problem for China.

Posted by phil_b 2005-04-24 6:24:09 PM|| 2005-04-24 6:24:09 PM|| Front Page Top

#4 Only if they keep taking your money Shipman. If they decied to swap to Â¥ or â¬ we are screwed.

Posted by Sock Puppet 0â Doom 2005-04-24 6:27:32 PM|| 2005-04-24 6:27:32 PM|| Front Page Top

#5 That's true SPoD, course they might not sell much.

Posted by Shipman 2005-04-24 7:32:07 PM|| 2005-04-24 7:32:07 PM|| Front Page Top

#6 Oil prices rose more than $1 a barrel Friday as global supply concerns were stoked by a terrorist attack in Saudi Arabia and refinery snags in the United States.

So what is it? Increasing consumption by China/India, or terrorist attacks and refinery snags? It seems ther have been a hundred different reasons given, and each one rotated accordingly.

Posted by Bomb-a-rama 2005-04-24 7:50:09 PM|| 2005-04-24 7:50:09 PM|| Front Page Top

#7 Nuclear f---ing power, NOW. Let's get the projects underway asap and quit dithering over whether oil will drop again. We've wasted decades and have no more time to waste.

Posted by thibaud (aka lex) 2005-04-24 9:01:04 PM|| 2005-04-24 9:01:04 PM|| Front Page Top

23:46 phil_b
23:38 JosephMendiola
23:04 Zhang Fei
22:49 Jackal
22:46 Jackal
22:40 Jackal
22:34 Jackal
22:15 Quana
21:44 thibaud (aka lex)
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21:32 Sock Puppet 0â Doom
21:27 Sock Puppet 0â Doom
21:27 Laurence of the Rats
21:26 Quana
21:22 Kirk
21:18 Sock Puppet 0â Doom
21:06 CrazyFool
21:05 thibaud (aka lex)
21:05 Frank G
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20:57 3dc
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