Royal Dutch Shell Plc  .com Rotating Header Image

Toronto Star: Price slick

Nov 05, 2007 04:30 AM
David Olive
 
We advised caution last week in betting on the current oil-price “superspike,” given the price slumps that have typically followed such outbreaks of exuberance ever since the first oil shocks of the 1970s.

This time we’ll let an oil giant make our case. It’s unusual for a company to essentially “talk down” the price of its products, but Royal Dutch/Shell PLC wasn’t shy when releasing its third-quarter earnings last week to warn that current record crude prices are being driven not by fundamentals of supply and demand, but speculation and political tension.

Shell would know about the latter, since it’s the rare month that its key Nigerian production isn’t disrupted by rebel groups. And petro-czar Vladimir Putin, showing more backbone than OPEC, has essentially expropriated some of Shell’s most promising Russian reserves.

The oil’s out there. It’s just falling into less stable hands. Which makes oil’s growing unreliability of supply the most powerful incentive for industrial consumers, in particular, to wean themselves from it by switching with increasing haste to alternate energy sources. At which point, as we said, the price will drop.

http://www.thestar.com/columnists/article/273477

royaldutchshellplc.com and its sister websites royaldutchshellgroup.com, shellenergy.website, shellnazihistory.com, royaldutchshell.website, johndonovan.website, shellnews.net and shell2004.com are all owned by John Donovan. There is also a Wikipedia article.

0 Comments on “Toronto Star: Price slick”

Leave a Comment

%d bloggers like this: