Oil prophet Jeff Rubin has a keen explanation for why the BP Oil Leak — which decreased production, wasted supplies, and jeopardized future off-shore drilling operations — did not thrust the world into the peak oil paradigm.
As of today, crude oil is down around $10-a-barrel.
Rubin blames this on the Greece crisis, which foreshadows a demand restriction across the indebted developed world.
[In] a world where oil supply will no longer be growing (and may even decline, if deep-water fields become off bounds), oil consumption suddenly becomes a zero-sum game. There must be fewer cars on the road in Greece and in the United States if there are to be more cars on the road in China and India.
The fiscal crisis in Europe and the US doesn’t mean the world will want less oil. It just means that global demand will become even more driven by the Chinas and Indias of the world. If you thought global economic growth and commodity demand were skewed to the developing world before all the developed economies ran up massive fiscal deficits, just wait until you see what the gap will look like when those economies have to start paying those deficits down.
Of course emerging market demand is picking up, so he still expects rising oil prices and triple-digit oil by year-end.
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