http://www.simmonsco-intl.com/web/html/worldoil.asp - an interesting essay on current crude price flux. Included are a couple of graphs showing supply. He also points out that past years projections re oil use were quite low when compared to actual use.

While basically upbeat he does give figures on cost of deepwater oil exploration and timeframes which show that it is more costly and takes longer than is generally thought. To me this is important because he states that there are basins of oil yet untapped - yet other than the Alaskan Arctic field I've read the untapped basins are generally deeperwater.

It very well could mean that the Saudi Arabians will be the only producers with the reserves and capability necessary to meet JIT world demand over the next few years at a price which will not cause world economic implosion.

Since the persistent rumour is that the Saudi's are demanding hard rather than fiat monies, ie precious metals or infrastuctures [weapons, public works projects (the recent Japanese fiasco)], for their oil this could easily create a situation whereby the USdollar, the yen, & possibly even the Euro will have the legs cut from underneath each currency. Yet, as attractive to the Saudi's as gold for oil might be, tanking currencies would have a net effect of lowering world oil consumption - something they clearly wouldn't want.

A true tightrope walk here - a finite resource, increasing cost of production and delivery in non-inflated currency units, a world economy based upon "controlled" inflation, & world consumption increasing beyond general forecasts.

mb

-- mitchell barnes (spanda@inreach.com), March 09, 2000

Answers

Thanks Mitchell. The jury appears to be filing back in to the room...

-- scott (lynx5_5@hotmail.com), March 10, 2000.