This from the Economist,
“OIL briefly reached another record on Tuesday May 6th as West Texas Intermediate traded at over $122 a barrel for the first time. Ten years ago a barrel fetched around $15. The feeble dollar, soaring demand and supply constraints have all helped to push up prices by 25% in the past four months alone. And there is little sign of respite for worried governments and consumers. This week Goldman Sachs, a bank, predicted that oil could reach $200 a barrel before the end of the year.”
Chart courtesy of the Economist
Oil just recently set a new record at $123.93.
For as long as government intrusions seen in many faces (price subsidies, supply “geographic” restrictions, nationalizations, massive credit expansions, currency debasement policies, high taxes, “strategic petroleum reserves”, et. al.), persist to distort market mechanisms, oil prices will continue to ascend (perhaps even more than $200) until demand crumbles. Eventually the market determines the outcome.
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