As always the news is now out why the back dated oil contracts have outperformed the near contracts. The IEA has drastically cut its supply forecast for oil. Instead of forecasting 116mm barrels a day in 2030 of supply, it is now only forecasting 100mm. Matt Simmons seems to be vindicated. What does that mean for the various equities. Oil service stocks strangely ehough may suffer as the current producers who have in the past rushed to produce as much as possible, may now actually curtail spending as the resources they seek are finite. Oil is not an ipod. Hence, rationing supply in a tight mkt is what a long term mgr may consider. Alternative energy stocks should benefit as would coal. If the amount of energy to be supplied by oil declines, the slack will be taken up by other forms of energy-solar, wind, nuclear, geo thermal, etc.
Recent oil spike has claimed more victims-namely the airlines and truckers. Airlines are based on a terrible model-they will merge to make a giant money losing business as opposed to several money loing businesses.
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