There are two divergent views about future oil supply in the market in the news, the doom and gloom and the relatively optimistic. Who to believe? Does it matter? Should the view to which we subscribe change our energy policy?
International Energy Agency says that demand may outstrip supply:
The Paris-based International Energy Agency is in the middle of its first attempt to comprehensively assess the condition of the world’s top 400 oil fields. Its findings won’t be released until November, but the bottom line is already clear: Future crude supplies could be far tighter than previously thought.
The IEA monitors energy markets for the world’s 26 most-advanced economies, including the U.S., Japan and all of Europe. It acts as a counterweight in the market to the views of the Organization of Petroleum Exporting Countries. The IEA’s endorsement of a crimped supply scenario likely will be interpreted by the cartel as yet another call to pump more oil — a call it will have a difficult time answering. Last week, the Saudis gave President Bush a lukewarm response to his plea for more oil, saying they were already adding 300,000 barrels a day to the market, an announcement that did nothing to cool prices.
Other energy market experts disagree:
many analysts are no longer so sure where oil is going, at least in the short term. Some say prices will fall as low as $70 a barrel by year-end, according to Thomson Financial.
Experts disagree over the supply of oil, the demand for it and whether recent speculation in the commodities markets has artificially raised prices.
IMO it doesn’t matter who is right. Foreign oil is a commodity whose supply and price structure is unstable. Americans should be demanding that their government immediately embark on a quest to produce far more sustainable energy – which does not include grain-based ethanol – from our own domestic resources. All of our cards should be on the table, including environmentalists’ sacred cows.