-
May 7, 2008 7:22 am US/Central
-
Digg |
Facebook |
E-mail
|
Print
In The Know: Cutting Oil Demand, Not Price
(WCCO)
The price of a barrel of oil closed at a record of nearly $122 Tuesday. Some analysts are predicting $7-per-gallon gasoline in the next two years. Others say the price of oil is headed down. Don Shelby says listen to your own common sense.
Your common sense is as accurate as these expert predictions. One expert is predicting $200-per-barrel oil by 2010. Another expert at Citigroup said a barrel of oil could just as easily be $40 in two years.
The only way the price of a barrel of oil might come down is if somehow we strengthen the American dollar. That would take a balance in trade, and maybe a balanced budget. Don't hold your breath.
Besides the weak dollar, Russia isn't producing the oil it promised, nor is Mexico, and Shell's Nigerian fields are in turmoil, and now the Kurds in Iraq are mad at us, and say they'll bomb their own oil fields.
So, what to do? Well, exactly what we are doing.
U.S. drivers have cut demand by nearly 330,000 barrels a day. We are conserving. That's the good news.
But prices won't fall very far as a result, because China and India and Russia have developed the American addiction, and they intend to stay high on gasoline at any price.
(© MMVIII, CBS Broadcasting Inc. All Rights Reserved.)