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Greenspan on Oil Prices

Former Fed Chairman Alan Greenspan says the increase in oil prices will “go on forever.”

Greenspan is not looking at short-term trading; he is focused on the fundamentals. He sees oil prices moving higher in spite of the slowing economy.

Douglas A. McIntyre at 24/7 Wall Street writes as follows:

Greenspan’s view of supply and demand in oil is sobering. For him to believe that oil prices will stay high he has to be forecasting that demand in emerging economies like India and China will not slow. His views may also indicate that he believes that the world supply of available oil has peaked.

Forever is a long time, especially if you own a car company or airline.

The number of drivers in China and India is still low — very low. The Greenspan viewpoint is anchored in long-term supply and demand.

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