South Korea to Start $22 Billion Fund for Oil, Gas Projects
South Korea needs to catch up to China and India, who have scoured the globe to lock in resources to fuel economic growth. Korea, the world’s fifth-largest importer of oil, buys in 97 percent of its energy and resource needs.
This sounds like the type of news that 3 years later everyone says was the sign of a bubble. Today it is hard to tell whether the boom in oil and commodity prices are a bubble or a sign of a huge demand increase that the cannot be supplied at current costs (combined with the plunging dollar which exaggerates the trends – and maybe by a decrease in supply too). I would have to say I am leaning toward a bubble signal but to what extent? Is the average price over the next 5 years going to be $50 a barrel (versus $93 today) versus say $25 a few years ago? Or is that price $100 or $150? In a few years people will say it was obvious today – what are they saying today?
Related: MIT’s Energy ‘Manhattan Project’ – 10 Stocks for 10 Years Update (Feb 2007)
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Oil has fallen to $40 a barrel from nearly $140 less than a year ago. Now that $140 level was the result of a huge spike in the price. But if I owned a bunch of oil (as a country or a company) I sure wouldn’t want to sell it at $40…