Mirabile dictu! Bloomberg reports:
“The IEA report today had a sizable decline in demand expectations for this year,” said James Ritterbusch, president of Ritterbusch & Associates, in Galena, Illinois. “It looks like they were too optimistic about demand and didn’t figure on the impact of high prices.” …
“In all of the excitement of the bull market a number of economists forgot that that the price mechanism works,” said Peter Beutel, president of energy consultant Cameron Hanover Inc. in New Canaan, Connecticut. “The price mechanism works by discouraging demand and by encouraging exploration and development of new supplies.”
Petroleo Brasileiro SA, Brazil’s state-controlled oil company, announced Nov. 8 that the Tupi field may hold 5 billion to 8 billion barrels.
The field, the second-largest found in the past 20 years, may hold as much as Norway’s 8.5 billion barrels of reserves, according to BP Plc. It could also boost Brazil’s reserves by almost two-thirds, transforming it from a small net exporter into a major supplier to world markets.
“Last week’s announcement from Brazil may be the vanguard of similar discoveries ahead,” Beutel said. “I think we will see supply grow in the next two years. High prices have led to increased supply in the past and I see no reason for that to change now.”
