"Vaughn Simon" wrote in message
...

"Tman" x@x wrote in message
. ..
It's supply and demand. Specifically, the short-run (in) elasticity of
supply and demand. I think the long-run elasticity of both will
surprise most everybody -- meaning that oil prices are going to go down
way more than most expect. In my opinion, this will happen over t+2 to
t+5 years from now. But that's just my opinion.

We are in the minority, but I also see one last 80's style worldwide oil
glut in our future. Unfortunately, the market will overreact to that
condition and quickly put us right back where we are today (or worse).
The wise investor will buy energy stocks just when things look the
bleakest.

There are just too many factors happening simultaneously for fuel prices
to continue their upward movement. 1) At least in the American market,
gasoline consumption is down, and the market for gas guzzlers has
evaporated. Just look at any American car lot and note what is now on the
front row compared to what was there 18 months ago. Further, worldwide
recession is moderating the growth in the world's demand for energy. 2)
Given current prices, energy companies are doing all they can do to bring
product to the market, including uncapping old wells that were previously
unprofitable, and including whole new supplies such as the Canadian oil
sands that should start coming online over the next two years. 3) As soon
as the market psychology turns around (may have already happened)
investors will flock to the latest "big thing" leaving oil futures and oil
stocks to fall until they become the biggest bargain in decades. Then the
cycle will repeat.


--
Vaughn

My only real point of possible dissagreement is the use of the words "one
last" instead of "another" at the beginning of the last post.

Both are unfortunate situations and, at least in the US, so easily
avoidable. One glaring example is the tax treatment of a personal vehicle
which is also used for business--in which most small cars are only given
half the tax deduction per mile when compared to most larger cars. Another,
at least in Florida, is the proliferation of various impediments to the
smooth flow of traffic--supposedly in the names of safety and
beautification--which waste both fuel and maintenance with excessive waiting
times and speed changes.

Peter