by TheDude » Wed 25 Jun 2008, 11:16:43
Kingcoal? Pstarr? Pup?
Oh. it's Yergin...
$this->bbcode_second_pass_quote('', 'N')EW YORK (CNNMoney.com) -- Oil expert Daniel Yergin told Congress on Wednesday that speculative oil traders have played a role in driving up prices but that the credit crisis and weaker dollar have also been factors.
"Financial markets are today playing an increasingly important role in price formation - responding to, accentuating, and exaggerating supply and demand, geopolitics and other trends," said Yergin, co-founder and chairman of Cambridge Energy Research Associates.
Yergin said that markets have helped fuel a "shortage psychology" that the world is "running out of oil."
"As prices go up, this psychology becomes self-reinforcing - at least until the market turns," said Yergin.
What could have prompted the notion that supply is tight in the first place, hmm?
$this->bbcode_second_pass_quote('', 'Y')ergin said that two years ago, he viewed a range of $120 to $150 a barrel as the "break point" for oil prices. Oil prices are currently trading within that range. Prices were flat in electronic trading on the New York Mercantile Exchange on Wednesday morning, falling 25 cents to $136.75 a barrel.
"As the committee knows, there is much talk about 'peak oil' supply these days," said Yergin. "However, we think something else is at hand - 'peak demand' - at least in terms of U.S. gasoline consumption," Yergin said. "In our view, 2007 may well have been the top, the peak, in terms of U.S. gasoline demand."
The average nationwide price for a gallon of unleaded gas was $4.067 on Wednesday, according to AAA. The highest recorded price of $4.080 occurred on June 16, according to AAA.
Yergin added that America must take aggressive measures to alleviate its oil problems. He said Americans should adopt a three-pronged approach: use of renewable energy sources and newly-discovered oil supplies - such as the discoveries in off-shore Brazil - as well as greater fuel efficiency.
So we need to fill up our tanks with wind turbines; and by increasing worldwide oil supply Americans will be motivated to use less of it for some reason; with decreasing prices automakers will be coerced into spending billions making more fuel-efficient vehicles to compensate for the reduced demand. Uh huh. Nice dispatch from Bizzaro World, Danny.
At least he's pointing out to them that this isn't all tulip mania. Chuck Schumer's on board I see.