Is 2006 the Year of the Massive Oil Shock?:
“No one knows for sure, but two industry heavyweights are warning about it. George Soros thinks that the rest of this year is a very dangerous and volatile time when it comes to energy markets. And Bill Browder of Heritage Capital and team have run regression testing on past oil shocks and then applied them to six possible near-time scenarios, one them resulting in oil at $262 a barrel.”
Nobody knows for sure of course what is going to happen. But in conversations with the financial people I know, everyone is jittery about what is going to happen in the next couple of months with Iran. The news about the Palestinian elections and the fallout from that event isn’t helping either.
The fear is that an unstable Middle East will lead to a further rise in the price of oil. (Oil doesn’t cost nearly its present price to produce. Most of the expense today is due to speculation.) Any perceived threat to oil distribution is going to drive the futures price higher. Which is in turn going to effect the price to the end-user. Which is going to raise prices for everyone. I’ve talked with folks who can see oil realistically going as high as $120/barel if the present unrest in the Middle East continues.
My concern of course is about the effect on parishes. An increase in heating, energy and travel costs is not going to be easily absorbed right now.
One of these days I need to write up my thoughts about the impact of re-urbanization driven by energy costs and the effect on the Episcopal Church. (But today is the day of the parish Annual Meeting, so I’ll have to get back to this later.)