Posted on 12/24/2007 7:54:16 AM PST by DBCJR
According to Chavez, if the United States invades Iran we can expect crude oil to soar to $200 a barrel. ...
Chavezs number appears to be plucked out of the air. If the United States attacked Iran, it would almost certainly result in an upward impact on crude prices. However being Shiite, Iran has no oil-producing allies - other than Venezuela.
The cost in lost production would be no more than 10% of gross world production. In the short term, the United States could use its Strategic Petroleum Reserve to plug the gap, but even if 10% of world production were lost for a considerable time, it would be most unlikely to send prices to $200.
As prices rose towards $200, the basic economic principle of supply and demand would cause oil consumption to decline in the face of rising crude prices. There is no evidence whatsoever that the marginal propensity to consume oil is as low as 0.1, which would be needed for a 10% reduction in output to produce a 100% increase in prices from already-elevated levels. Much more likely, a squeeze in output would spawn a price increase of no more than 20% - to a peak of $120 a barrel - with any higher prices being only a short-term blip due to speculative pressures... oil consumption would decline sufficiently as consumers and commercial interests alike adjusted to the much-higher costs of energy, transportation and raw-materials costs. The U.S. and global economies would undoubtedly slow markedly - and would most probably even drop into a recession. But that recession, in itself, would reduce oil consumption and would therefore arrest any additional upward movement in oil prices.
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(Excerpt) Read more at moneymorning.com ...
We are going to have to put up with being blackmailed by Hugo and the Arabs until congress approves a program to develop an oil supply system. Be it shale oil or from under the oceans. As long as we have to rely on someone else for oil we will remain a victims of extortionists.
California.
Prices have doubled since dims took Congress and gasoline is remaining just under $3.00.Sadly that $3.00 is about double what it was when Bush took office.
Invade Alaska.
Washington, DC
Washington, DC
Alaska, Florida and California.
I actually agree completely with you both. It's obvious that both parties are more interested in preserving campaign issues than enacting their platforms. I just figured if I made a remark like that I'd be in for a long argument with some folks here...and I don't have all day for that. ;-)
Your right however I don’t think they will get out from under the hair dryers.
“Where Should We Invade to Bring Down Oil Prices?”
California, there are hundreds of years supply sitting underground and offshore.
My wife and I are both 5th generation So. Californians and find it criminal that the envirowhackos have shut down our oil .
ANWR!
Congress in the house and senate. Toss those who are opposed to domestic oil production from refineries to drilling Alaska out on the streets no matter their party. That would solve many of our nations ills right there.
Where should we invade?
I say - Florida.
Ding, ding, ding, ding........Ladies and gentlemen, we have a winnah here!!!!!
“DNC Headquarters?”
You beat me to it.!!!
LOL!!!
Don't kid yourself, the oil companies make huge profits due to environmental restrictions.
Get the popcorn. Cynthia McKinney against the ARMY!
“While were at it we could level Mecca and Medina.”
That would be the ultimate solution for saving the West and the rest of the world - Islam without Mecca and Medina would be like a ship without a rudder.
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