LyrArc Article Gist
Does housing and rising oil prices combine to affect growth and by how much. Note the comments about oil prices. That cost of producing a barrel is only $25 a barrel, thats the average cost according to John Herold Inc. a research company for finding oil, developing the field,pumping it, and delivering it to storage. Oil Analytics president Fingerman thinks prices at $85 are not supported by fundamentals and prices should be $30 to $40 lower. Fadel Gheit of Oppenheimer also thinks industry fundamentals do not support prices above $60. What will this do in the long run? Will China's growth slow after the Olympics? Are alternative fuels and more fuel efficient cars, and a shift to smaller cars, and even electric cars, going to have an impact down the road in gasoline consumption. Geopolitical instability from Nigeria, Iran and most recently Kurish Iraq and Turkey has been part of the runup in oil prices, also insufficient inventory buildup for the winter season, and the generally low rates of replenishment of oil that is being consumed with new exploration. How many of these factors may reverse in the coming years?