Editorial comment ///

Well, what happened was...Since 2004, China or India often pops up in the press and conversations about soaring oil demand. While it is of some interest to statisticians and forecasters-perhaps more so in recent years, while searching for an explanation of prices that fits-it doesn’t make sense to lay global demand at those countries’ feet alone. The last I heard, oil was a global commodity. And if a country or group of countries were to simply decrease supply to the world, well...that’s what OPEC does every day. And it’s able to do it with ease at the moment (claimed 66% compliance among members), since it doesn’t have to take that much supply off the table and, in any event, global surplus capacity is not as high as it once was (about 5 million barrels a day in 2002 vs. 1.5 million today), although it is slowly building.

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