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The OPEC President claims that there's no shortage of oil, yet, the price keeps going up and we see reports of shortages from around the world. I think perhaps he means that there's no shortages of dollars in the OPEC nations' bank accounts.
Or, is the market figuring on Bush invading Iran sometime soon, thus adding a "risk" premium??
E. Swanson
"Of course there's no shortage. We have 80mbd! It will just get a *little* more expensive, oki? Not a big problem is it? Oh you think so, well that's subjective, no? No, you say? Well, not my problem"
Mind of OPEC president
There is no shortage of supply, only an excess of demand. It is all a matter of perspective and semantics, see?
;-)
OPEC president is absolutely right. There is no shortage of oil. As an analogy there is also no shortage of say private islands for sale. A lot of people would like to buy their own island, but price does not let us. Same with oil (but to a far lesser extend for now). Oil demand is still fairly elastic (we can choose to use way less oil if we stop taking vacations, driving alone, and so on). Higher price kills some of the demand so demand and supply is always (at least for now) is in balance.
The issue is not a shortage, but a high price. OPEC conveniently uses notion of shortage knowing full well that shortage can not exist for now in the capitalist economies. It is the price that defines the relationship between supply and demand not shortages.
OPEC president is right that there are no shortages in the developed world. He omits the third world, but this is so common that is left unnoticed - nobody cares about them anyway.
Many poor countries are being priced out of the market. They are necessary subsidizing internal consumption (to avoid unrest) so their internal prices do not reflect true supply/demand ratio and the shortages are there. When asked about this, the western hypocrite advice is "release the prices"... so that only the rich folks in the corresponding countries be able to afford fuel.
I expect that PO will look like falling off the cliff... the 3rd world countries will be falling off one by one in the order of wealth. After some time the rich guys will come up with alternatives... but what will likely happen is that there will be decades in which Americans will be driving their plug-in hybrids and at the same time Nigerians will pay half a wage for home heating fuel. PO will only increase suffering and inequality, actually it already does.