What does $80-per-barrel oil say to you?From the Globe.
Three years ago, it would have told you that global oil markets were at record tightness. Back then, the U.S. president was making a personal pilgrimage to Saudi Arabia to vainly plead for more production. And economists were worrying about the implications for global economic growth.
Today, it seems the goalposts have suddenly moved. After filling up on $4-per-gallon gasoline only two Memorial Day weekends ago, today’s $2.20-per-gallon average gasoline price doesn’t seem so expensive to American motorists anymore.
And suddenly, $80-per-barrel oil is no longer seen by the Saudis as threatening global oil demand, but is instead viewed as a minimum price for their nation to invest in new supply. And as far as my fellow economists are concerned, we’ve heard not even a peep from them about what these types of oil prices may mean for the global economy in the days ahead.
But how much longer can the world pretend that it won’t soon be facing another energy shock, one every bit as challenging as the one it faced two years ago?
Wednesday, March 31, 2010
Rubin: Expect a new peak for oil next year
They aren't making any more of it, so this should come as no surprise: