Sneak Peek at Weekend Reading
Here is sneak peek at some links from my weekly Weekend Reading column over at TheStreet.com:
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Archives
June 8, 2008
Oil-price supernova spurs search for alternatives (Reuters) Time to put investment banking back in its box (Bloomberg.com) Water-Starved California Slows Development (NYTimes.com) Food Allergies Trigger Multibillion-Dollar Specialty Market (washingtonpost.com) Herd Behavior in Financial Markets: An Experiment with Financial Market Professionals (IMF) Oil prices in other currencies (Econbrowser)
Resource Nationalism and the Oil Problem
On-point Reuters piece this weekend talking about the above-the-ground issues curtailing oil supplies. The gist: resource nationalism -- countries nationalizing and controlling their domestic oil industries -- is changing the way global oil markets respond to higher prices. After all, when you can revenue acceleration from a finite resource without increasing supply, why bother pumping more?
Conventional wisdom in past years has been that when oil prices rise high enough, oil companies will have the profit motive to spend the billions of dollars needed to bring new supply sources online.
But resource nationalism has turned such wisdom on its head, investment bank Goldman Sachs said in a recent report.
Resource nationalism "imposes significant policy constraints on the free flow of capital, labor and technology that are substantially limiting supply growth," Goldman Sachs said in its report, which also called for benchmark U.S. oil prices to average $141 a barrel in the second half of 2008.
Such constraints have reduced oil supply growth by 1 percent per year, even while the global economy grows at nearly 4 percent, the bank said.
Resource Nationalism and the Oil Problem
On-point Reuters piece this weekend talking about the above-the-ground issues curtailing oil supplies. The gist: resource nationalism -- countries nationalizing and controlling their domestic oil industries -- is changing the way global oil markets respond to higher prices. After all, when you can revenue acceleration from a finite resource without increasing supply, why bother pumping more?
Conventional wisdom in past years has been that when oil prices rise high enough, oil companies will have the profit motive to spend the billions of dollars needed to bring new supply sources online.
But resource nationalism has turned such wisdom on its head, investment bank Goldman Sachs said in a recent report.
Resource nationalism "imposes significant policy constraints on the free flow of capital, labor and technology that are substantially limiting supply growth," Goldman Sachs said in its report, which also called for benchmark U.S. oil prices to average $141 a barrel in the second half of 2008.
Such constraints have reduced oil supply growth by 1 percent per year, even while the global economy grows at nearly 4 percent, the bank said.
