bob the lover

Where Does Oil Go from Here?

Longoil,

I know that oil is subsidized in China- but my argument stands.

At some point the Chinese government will stop the subsidies. Oil at what cost- if it continues at a torrid pace past 150dollar per barrel- what chance does the Yuan have?

Inflation will decimate emerging markets if oil does not subside.
Americans have stopped driving SUV’s mass transit usage is up- Neither the Chinese government nor its citizens will continue to purchase oil at obscene prices.

Have you seen how small the cars are in Great Britain - mass transit in Europe is first rate. 10 dollar oil has made the Europeans extremely Spartan in their driving habits.

Demand destruction is real- and if oil continues upwards demand will drop from the emerging markets- because they won’t be able to afford it.

I ask- if the United States cannot afford 150dollar oil- how can the Chinese Yuan afford it?