[Graeme]

Double-digit oil price is history: R S Sharma

$this->bbcode_second_pass_quote('', 'O')ilonomics has gone haywire. The rise in oil prices has now started to hurt. Crude oil price increased five-fold in five years (from $22 per barrel in 2003); doubling in just fourteen months (from $54 per barrel in January 2007 to $110 per barrel in March 2008).

The fundamentals behind the spectacular price increase are the booming energy demand, shrinking conventional resources and consequent shift in demand-supply axis. However, not all of the increase in the past few years has been due to the fundamentals; associated dynamics like a weakening dollar, speculative activities and fear of supply disruptions from unstable resource centres have played a significant role.

OPEC signals the long-term floor benchmark to be around $90 per barrel. But the charged oil market, with its historical complexities, cannot offer anything except a further flaring in the price. I strongly believe double-digit oil price is already history. Oil addicted economies, the world over, will have to reconcile to this fact and work out suitable solutions to insulate development from the oil price curve. India, one of the fastest growing economies with an ever-growing appetite for all forms of energy, is not an exception.

I believe we do not have any options other than recognising the long-term devastating effects of flared-up oil prices. We need to bite the bullet and go for energy demand management with a vengeance. Increasing efficiency of transportation, residential, commercial, and industrial uses is a must. Further, we need to ease the pressure on oil and gas by expansion and diversification of other energy resources. Besides demand management, locating and developing new oil & gas assets, improving recovery from matured reservoirs, creating new supply links and opening up non-conventional energy resources are the pressing priorities.

[DantesPeak]

There has been a number of hard hitting articles coming out of the India Times. Apparently 'bad news' articles there aren't as watered down as much as they are in the US.