Water Cooler

RE: Contrarian Economist or just confused?

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No one knows what the price of oil should be. It's controlled and modulated by a cartel. There does appear to be some speculation in the market. However, a few months ago, OPEC claimed that $70.00 a barrel was a reasonable cost for a barrel of oil. Recently, they took it back, and claimed that $200.00 might be a more reasonable price.

You would think that they would be pumping every once of oil out of the ground they could at $120.00 a barrel. But why? So far, the world economy hasn't seemed to tank to badly -- which might force them to lower prices. So why not just produce LESS and make more, rather than produce too much and drive down prices.

The reason prices are high, the main reason, is the burgeoning demand from China and India. Essentially, you have nearly 40% of the world's population joining the modern, industrial world. That's a heck of a lot of demand. With that kind of demand in the pipeline, why would OPEC cut prices?

Only ONE reason: competition from other sources. It's coming.

FIRST SOLAR CORPORATION, one of a myriad of alternative energy companies, today sported a market cap of $20,000,000,000. Their net income: only about $160,000,000. That's 125 times earnings!!!!!!!

There's a heck of a lot of money going into alternative energy -- all around the world. And you know what? It didn't take the a single bill or committee meeting in Congress for this to happen.

OPEC will keep its price as high as it can, or as low as it must to prevent competition from other sources from coming on line. For the immediate future, they are in the driver's seat once again.

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