Friday, October 20, 2006

Great news all around...

So after this week's reports of significantly higher than expected increases in oil consumption this past month after oil prices dropped, comes OPEC's decision to....cut oil production by even more than expected, while expressing interest in potential future cuts.

This is bad news all around. Stabilized international prices have receeded from their record levels, which may have to some extent desensitized Americans to high oil prices, or at least given us the impression that it's something to weather. Increasing demand and decreasing supply. Effectively, this will strengthen the OPEC/Russian chokehold on American policy, while at the same time taking more American dollars. Most import, and I think, disheartening, are the stark increases in demand. These are, I should note, increases over past baseline measures, not a by-month result of dropping prices. Weaning Americans off of oil is becoming both more difficult and more pressing at the same time.

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