Oil

I was interviewed by WMBD TV today. The subject was oil prices. When you're reading on the Internet that oil hit $53/barrel and the phone rings, sometimes you just have a feeling about who's on the other end. Anyway, a couple things I mentioned that didn't make it into the story (at least not at 10pm which was the only newscast I saw) were that the price of oil in 1980, if it were adjusted for inflation, would be close to $80/barrel and that today we use about 1/3 fewer BTUs per dollar of GDP than in 1980.

That is not to say that $53/barrel will be without pain. I am worried about the situation in Nigeria and Russia, not to mention the Middle East. There could be a perfect storm brewing. If we can catch a break, maybe prices won't go too much higher as we go into the winter. If we don't catch a break and everything goes wrong that can go wrong, it will be a long winter indeed.