05-07-2010, 05:40 PM
I was just putting together some charts for work recently, and since 1946, the average price of Oil is roughly $18. It got into the $40 range in early 2009 after hitting a high around $130 in 2008. The trend since early 2009 is upward. We're now back in the $80-90 range even during a tough economy, and as long as the dollar is weak, commodities will continue to go up, even when demand is down here in the States. Emerging markets make up the largest part of demand skyrocketing over the past decade. The big wildcard with oil is the idea that the known reserves around the world are hard to pin down. I don't believe that most of the oil companies (and sovereign oil conglomerates like in the Middle East and Venezuela) have any idea what an accurate number is, so whenever there are revisions (Shell had a massive one a few years ago), the ripple effects are massive.
Anyway, what scares me is that once again we are falling behind the rest of the world in alternative energy technology development. The Far East is ahead of the curve in Clean Tech R&D, which makes sense because their economic growth depends on it. And here we are still debating climate change and talking up the economic costs of moving away from fossil fuels, while ignoring the opportunity costs involved in maintaining the status quo. We should own this space, but we are stuck in the 1950s.
Anyway, what scares me is that once again we are falling behind the rest of the world in alternative energy technology development. The Far East is ahead of the curve in Clean Tech R&D, which makes sense because their economic growth depends on it. And here we are still debating climate change and talking up the economic costs of moving away from fossil fuels, while ignoring the opportunity costs involved in maintaining the status quo. We should own this space, but we are stuck in the 1950s.