Oil Rises to 7 Year High Approaching Levels of 2008 Meltdown
Editor's Comments
Many leading experts and oil executives now expect oil prices to climb well over $100 a barrel this year and that would be disastrous for the economy just as it was in 2008.
We know that we are on the downward supply slope that anticipates exhaustion by 2050. The pressure and trend are towards higher and higher prices. Like it or not - oil is the lifeblood of energy and thereby the economy.
Huge increases in prices could have massive inflationary effects combined with asset deflation that could collapse the banking sector as collateral values decline beyond lending obligations and fresh lending shrinks dramatically under large interest rate increases.
To sum up, the global economy faces a tough road ahead as we cannot defeat the mathematics of hard physical constraints with finite resources.
T A McNeil
Founder CEO
First Financial Insights
A picture says it all...
Oil rocketed to a fresh seven-year high above $92 a barrel, and almost every indicator is pointing to the rally extending. The market’s structure is trading at its strongest level in years, indicating scarce supply. Diesel — the fuel that helps power the global economy — is also surging as a cold snap hits the U.S. and demand soars.
Inventories at key storage hubs are waning, and vital price gauges indicate an expectation the tightness will persist. Traders increasingly suspect demand is being underestimated as economies emerge from Covid-19. Saudi Arabia’s state oil company said late last month that consumption will soon return to pre-pandemic levels, though International Energy
Agency data show it about 1 million barrels a day lower in the first quarter than during the same period in 2019. The outlook for a tight oil market is being reflected in high prices at the pump.
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