Friday, August 05, 2005

The simple truths of the energy spike.

MarketWatch: Don't ask the experts.


So it's important to filter out the disinformation. If someone says they're an "expert" trader, beware. See what they have to back it up -- and that comes from, well an expert who at least knows enough to know he doesn't know everything.

So the next time I'm asked at a party if oil going higher, I know my answer:

"The 1970s oil shocks occurred when U.S. oil imports were far lower than today. America now imports well over half its oil compared with about 35% in 1973. This level of dependence on imports, nearly 60%, is the highest in this nation's history, and will continue to increase as we use up domestic resources.

"The vast majority of the world's oil reserves are concentrated in the Middle East, 65% to 75%, and controlled by the members of OPEC.

"The United States accounts for about 25% of global oil consumption but has only 3% of proven global oil reserves. So you tell me!

"Hey, are those pigs in a blanket over there? Time to deplete another reserve."