Non-Renewable Resources

Share prices for companies based on non-renewable resources such as oil illustrate a slightly different behaviour that gives a better understanding of the share price capacity. Oil is currently produced fairly consistently. However, year by year, demand has exceeded supply. This has put a consistent pressure on the share price capacity for the past 10 years. Nothing has happened to destabilize the supply, so chaotic behaviour has been minimal. If the movement towards geener technologies that are not dependent on oil of both the renewable and non renewable kind could proceed rapidly, there could and should be some long term relief, but certainly not for 2008 to 2012.

The big danger for the world economy and the price of oil is Israel and the view of the USA towards Iran. Were either countries to carry out preemptive attacks against Iran, oil supplies would be destabilised. Another risk is terrorism, but as this has a smaller and more local impact, recovery from this would be quicker. Terrorism is unlikely to lead to a regional war, whereas the Israeli and Bush administration’s world view are currently big threats to world stability. This is compounded by the weakness of the UN as a mediatory and peace making body.