Few question the prevailing wisdom that tensions with Iran have caused the recent rise in oil prices. But another possibility exists – and it’s a much greater long-term threat to economic growth.
Oil prices last spiked, in 2008, because supply and demand were tightly balanced. Those conditions may have returned, according to Jim Hansen.
Hansen is an independent financial consultant with Ravenna Capital Management in Seattle. His practice focuses on investing in the energy sector, and he distributes a weekly report a broad range of issues related to peak oil.
Over lunch a week ago, Hansen told me that “global spare capacity is approaching zero from a statistical standpoint,” and those conditions are the primary driver of the recent rise in oil prices.
Hansen is not an alarmist when it comes to energy, and doesn’t expect a return to the lines that snarled streets near gasoline stations during the 1973 oil crisis. His analysis is backed by a careful examination of the data. (more)