Still More News on High Oil & Gas Prices
posted by Ben Engebreth on 04.01.2005
Once again there's something spooking the oil and gas markets. Since the price of oil and gas has been in the news so much, I've been talking about it a lot here. As of late, most of the news has been pretty gloomy, which means I haven't had many optimistic things to relate. What I don't want to do is come across as a purveyor of doom and gloom. I'm actually quite optimistic about the future and the role technology will play helping us meet increasing energy needs. With Pooln I'm trying to use technology to work on the demand side of things. In other words, Pooln is conservation effort. My theory is that rising energy prices (such as gasoline & oil) will to some degree encourage things like carpooling. I am admittedly curious to see if this is true. I am not, however, looking for energy costs to spiral out of control such that individuals and economies are negatively impacted. That's not what this is about.
Having said that, let's get back to the news. The big story in the last 24 hours has been a statement by Goldman Sachs that oil may have entered a "super spike" period. Right now oil is trading at the $57 and change level. Goldman said it might be possible to see up to $105 a barrel if there were to be any disruptions in production. They seem to think that the current capacity cushion is too low to allow for much variation in output. Combined with rapidly increasing consumption from China and India it's obvious that Goldman feels there's a whole lot of upward price pressure. While there's a lot of good points made here, it is worth noting that Goldman has a financial interest in the industry and they would certainly benefit to some degree if prices went as high as they are speculating.
More on rising prices and Goldman's report here and here