Wednesday, April 22, 2009

Is Oil Supply Shrinking Faster Than Demand?

It appears so - as you can see from the chart here, oil supply is projected to shrink by a significant amount each quarter of 2009:

This chart is courtesy of Frank Holmes, who writes on his blog:

It’s also important to point out that it is much cheaper and easier to cut supply than to bring that same supply back on line. Demand for commodities will likely be hastened by the trillions in stimulus spending by the United States, China, Europe and others. When that happens, there’s a good chance of a supply shortage.

Frank is the CEO of US Global Investors, a commodity focused fund, and one smart dude when it comes to commodities.  Definitely worth reading his entire blog post here.

1 comment:

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