Friday, April 08, 2005

IMF warns of 'permanent oil shock'

I almost feel as if the International Monetary Fund, by embracing a forecast of permanently high oil prices, is signalling in a contrarian way a temporary top to the oil market. But, alas, the IMF was roundly criticized since "no other international energy body shares its view." As long as that's true, it'll be a sign that oil has further to run. When the IMF is joined by everyone else (at what price though, $80, $90, $100), then oil's march upward will probably abate and even reverse.

The cause of the "shock": Increasing demand in the face of supply that cannot keep up. It doesn't mean we've reached a peak in world oil production, but we're certainly moving faster than ever toward one.

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1 comment:

Tim said...

That "no other international agency shares its view" comment may change soon if this article is true. "IEA warns against possible acute oil shortage."

Tim
The Future is Green