Hand it to Al Gore. He was right about all of that energy consumption and fuel burning eating up the ozone and killing the planet. Now citizens will have to pay more for the pleasures of pollution.
Oil hit $87 on the NYMEX and there is little reason to think that the number is not headed higher. The excuse today was that Turkey is fighting with it neighbors. The excuses will move to Venezuela next, then to Nigeria. OPEC will only raise supply 2% next month and the Chinese government says that imports there rose 18% in the first eight months of the year.
It is becoming hard to ignore the simple math of rising consumption, especially as the Winter comes to the Norther Hemisphere. Auto production in India and China is moving up quickly as the roads in those countries begin to look like the ones around Los Angeles. Boeing (BA) says it expects China will need over 2,000 new commercial airplanes in the next 20 years. Those will not operate on ethanol.
For the time being, the global economy is still growing, and, in most countries, at a fairly brisk pace. Oil is the lubricant of advancing GDPs, and, as Will Rogers said "They ain’t making any more of it."
Douglas A. McIntyre