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October 28, 2007



Oct 28's Financial Times also commented on the oil price and comparisons to previous episodes of high prices:
Key points:

In real terms, we are still around 20% away from the peak

While some analysts and OPEC blame speculators, the fact that OPEC cut production last year, and that there have been no notable supply shocks, fly in the face of those arguments. [If the price is mostly demand-driven, then there isn't going to be any 'reaction' to the oil price, because it is the oil price itself which is doing the reacting!]

Based on barrels-of-oil, per-capita GDP is 35% richer today than in the early 80’s, even at today’s ‘elevated’ oil prices. So oil is a smaller part of the world economy, and we can better afford these prices.

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