At 15/08/2001 23:45, Doug wrote:
>Michael asked the other day what might counteract tendencies toward slump.
>I mentioned U.S. tax rebates and almost 100 central bank easings worldwide
>since December, with more almost certainly on the way. I could also have
>mentioned the decline in energy prices. Wellhead prices for natural gas in
>the U.S. are down 63% from their January peaks. Gasoline prices are off
>over 20% since spring. This is good news for (nonenergy) demand, if not
>for Mother Earth.
I wouldn't rush to draw much comfort from the temporary fall in natgas
prices. It's actually a serious that what is wrong with the underlying
energy equation is not being put right. Look at supply, where apart from
(astronomically expensive) Gulf of Mexico deepwater oil (not gas) there is
accelerated depletion everywhere, and ask yourself whether this kind of
price volatility will ever get investment into building a pipeline from
Alaskan stranded gas fields. Without this investment, and almost certainly
even with this, any serious uptick will have the US economy banging its
head on the energy ceiling again.
Mark Jones
