Friday, May 23, 2008

Demand is no longer king....

at least when it comes to the forecasts of the International Energy Agency (IEA). Their widely respected forecasts have been based on the demand for energy; they assumed that the supply was close to infinite in that it could always meet demand. Now, the situation has changed so much that they are embarking on a major study to analyze the supply of oil.

I suppose that their reliance on demand made sense for a fair period of time. But, when you have Saudi Arabia and other countries unwilling to reveal their reserves and the only output numbers come from a small consulting company over a grocery store in Geneva that looks at shipment of oil by tankers, I'd say it's about time that the IEA started looking at both demand and supply.

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