Is the Oil Crises Over?

Yes, according to Matthew Lynn at Bloomberg:

Forget that order for a funny- looking electric car. Take the solar panels off the roof. Don’t worry about hoarding tinned food for the long economic slump that is about to engulf the world.
Why? Because the oil crisis we were all concerned about less than a year ago is quietly going away.
The laws of supply and demand are starting to restore market calm. They suggest that although oil isn’t about to get really cheap, talk of $100 a barrel can now be put to rest.
That will give an extra leg to economic growth and stop central bankers from fretting about inflation.
“The fundamentals are starting to quietly reassert themselves,” Simon Hayley, senior international economist at Capital Economics Ltd. in London, said in a telephone interview.

Oil is down to $61.15 a barrel today.

Posted by on February 13th, 2006 at 1:52 pm


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