Paris for President: Energy crisis solved

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Actually...

"Only problem with Paris?s solution: any production from offshore drilling won?t kick in for five years..."

Unfortunately, this shows an ignorance of how gas prices are arrived at. While production from those sources won't arrive in the markets for five years, the prices will on the futures market will drop significantly within about 15 minutes. The primary reason for this is that the traders (primarily the oil processing companies buying the crude) will be buying fewer extra reserves, due to a perceived increase in stability in the supply. That means lowered demand without lowered supply, which drives the price down. It may be driven down even further and faster if the traders start selling off some of their extra reserves. Given the current cycle through from delivery of crude to delivery to the pump, you're looking at probably a couple of weeks to a month or so before the pumps drop significantly.

Posted by: Thought1   Posted on: 08/06/08  (Edited: 08/06/2008 @ 09:39) You are currently: a Guest | Members login | Terms of Use

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