Thursday 10th November 2005 AD
"THE ENERGY PRICE DEBATE"

The subject of current and future oil and gas prices is one that almost everyone has an opinion, and one in which we are keenly interested.  Many hold to the view that we have, or are quickly approaching peak oil production and we are entering a period of tighter supply/demand.  Others hold the view that oil prices are political, and subject to manipulation by large oil multi-nationals companies.

Everyone looks to China as the leader the every growing demand side of the energy market.  Some believe that China's growth will slow as the US and other western economies slow, although recent growth in China's economy surprised everyone to the upside, with reports of GDP growth at 9.4% in the 3rd quarter 05.  This seems to indicate that China will continue to grow rapidly, adding pressure to the energy supplies, regardless of slower western economic activity.

Last Wednesday, Matthew Simmons, whose commentary and work we have followed for sometime, said, "consumers should brace for crude oil and natural gas prices possibly doubling or tripling this winter, prices are really cheap today and they need to go a lot higher, and they probably will go a lot higher."

"Double or tripling of oil prices?" This is certainly not the kind of news people want to hear.  There is no question that world-wide supply is becoming tighter and demand stronger, and in the long run this will led to higher prices.

Best Regards  - Philip Judge pjudge@anglofareast.com