After spending the day moving in a big rented Penske truck I found myself appreciating the fact that gas prices took a break from their daily records climb. And the weekly EIA report on natural gas stockpiles showed an above average gain in inventories, further sending natural gas prices and oil prices down (even though inventories are still 13.5% below last year and 2.1% below the five-year average). Other bearish news was the fact that high-level diplomats will meet with their Iranian counterparts for the first time in 30 years. See, peace does pay off economically, not just spiritually. So energy prices relaxed further today as a result of these developments.
But I’m still happy I now have an apartment in Manhattan where I can travel day-to-day by bicycle and electrified subway rather than oil — because the fundamentals behind continued oil price hikes remain. The IMF raised its forecast of 2008 global growth from an April estimate of 3.7% to 4.1% — with China continuing a tremendous clip at 9.7%. Car sales are booming in the emerging economies driving global GDP growth. The other bit of news was in natural gas, as the leading business lobby of Russia encouraged its government to start and host a cartel of natural gas exporters, a “gas OPEC,” which could hold production back to ensure high natural gas prices long into the future.
So, while today was another bit of rest for our beleaguered economies on the energy side — large forces are at work to prevent the price slide from continuing much longer. Al Gore and Texan politicians praised wind today in some announcements that I will discuss in the next blog tomorrow…
Onwards to sustainability-
Tags: IMF, Natural Gas, oil prices, OPEC