Lynne Kiesling
With all of the blather about how an economic downturn will reduce the demand for oil, and with oil prices hovering around $80 right now, this WSJ Environmental Capital post is a welcome reminder that market processes are about the intersection of supply and demand. An economic downturn will also reduce the resources available to fund exploration and drilling, so there’s likely to be a supply-side effect as well. On balance, the oil price path will depend on the relative magnitudes of those supply and demand effects.