Reply #14: Cover for a PRODUCTION PLUNGE? [View All]

I believe it was Matt Simmons of ASPO (Web Cite:http://www.peakoil.net/) who stated that he believes Saudi Arabia's Biggest oil field will water out early next year. When that does 10% of world wide oil production goes with it. So production quota may just be a way for OPEC to save face and claim it is still in control of the price of oil. The real situation will be the price will be set by those people who STOP using it after the price gets so high. I predict $5.00 a gallon.

Alternative Reason: Some Economist (The Arabs do have them also) may have calculated that the US Dollar will drop drastically by the second Quarter and given that drop price of oil in the US will be $5.00 a gallon if OPEC tries to keep the price to Europe stable. This will reveal to the world that OPEC is setting the price of Oil in Euros not Dollars, and further the decline of the US Dollar.

Either way we in the US are looking at $5.00 a gallon gasoline. I come up with $5.00 for minimum wage workers can no longer, pay their rent (if they are in Public Housing), feed themselves, AND PAY FOR GASOLINE FOR THEIR AUTOMOBILE at $5.00 a gallon. Such mini mun wage employees will have to stop buying Gasoline and that act will drop demand.

Notice the issue is when a sizable part of the US driving public stop buying gasoline. That will drop demand, but remember that drop will reflect such minimum wage employees will NO LONGER BE WORKING.

Matthews Simons Speech on this subject:
http://www.energybulletin.net/1264.html