Oil prices are going to go back up

by | Aug 24, 2008


I’ve been banging on about this, I know, but two more signals pointing in that direction from last week are worth noting.  One was an FT piece by Nick Butler (VP for Strategy at BP for a long time, now at the Judge Business School at Cambridge), in which he argues the current price dip is just a “lull in the storm“.  The other is a new report entitled The Coming Oil Supply Crunch by Paul Stevens, a colleague at Chatham House.  He says:

…unless there is a collapse in oil demand within the next five to ten years, there will be a serious oil ‘supply crunch’ – not because of below-ground resource constraints but because of inadequate investment by international oil companies (IOCs) and national oil companies (NOCs).

Conclusion: “a spike of over $200 is possible”. Meanwhile, the CIBC paper entitled Could Soaring Transport Costs Reverse Globalisation? (pdf here – scroll to 2nd item), which I posted on at the start of June, has been continuing to do the rounds: the New York Times had an article on it on 3 August, and Reuters picked it up in a widely syndicated piece a week later.  Paul Krugman flags up a new NBER Working Paper on the same issue, and concludes:

If high oil prices persist, we could be seeing a large drop in world trade.

Author

  • Alex Evans

    Alex Evans is founder of Larger Us, which explores how we can use psychology to reduce political tribalism and polarisation, a senior fellow at New York University, and author of The Myth Gap: What Happens When Evidence and Arguments Aren’t Enough? (Penguin, 2017). He is a former Campaign Director of the 50 million member global citizen’s movement Avaaz, special adviser to two UK Cabinet Ministers, climate expert in the UN Secretary-General’s office, and was Research Director for the Business Commission on Sustainable Development. Alex lives with his wife and two children in Yorkshire.

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