Cost of living in Finding/Owning French Property Posted May 17, 2008 Sorry Ernie, I was in a hurry to get to the market and put that a bit bluntly...It was from an economic review magazine I borrowed from a US economics student on a flight, written by a group of economic lecturers, unfortunatly I cant remember the name.Basically from what I can remeber, it based its conclusion on the following (in a perfect storm kind of way)Increasing demand:see India and Chinathe biofuel situation, either people eat or people drive, world food reserves are the lowest for thirty years governments are going to realise, hopefully sooner rather than later, that people need food more than fuel and cut back on the production of biofuels in favour of food production which will increase the pressure on oil production (see malaysia, they built three new biofuel plants and have never used them because the population decided that they would rather cook with the palm oil.) Throw in a failed harvest and it will speed the whole process up.Supply issues: Iran cant increase supply, the goverment takes so much of the revenue that there is no investment in production infrastructure, to the point that the system is becoming overload and unsafe; a small accident....Saudi Arabia, said that they wont increase supply because the market demand isnt increasing. Current price hikes are driven by speculators profiting, however, the authors thought that Saudi is very near maximum supply anyway and have little wiggle room, they have also claimed the same amount of reserves in the ground for the last 20 years despite all that has been taken out, so they might have already reached peak production.North Sea, enough said...Exploration, there is still oil out there, but the cost of getting out of the ground is increasing exponentially, see North pole, the new apperent reserves off Australia. The article compared the net energy from one litre of oil from the canadian tar sands to a backed potato with butter (made me laugh)Throw into all that some decent supply problems, eg the pipeline in Nigeria catching fire again or trouble in a major oil produceing country... As late as last year a number of economists were laughed at when they predicted 100$ a barrel. As I said, its a bit of a perfect storm situation, and Im not taking all that the article said a gospel, but a couple of things happen at the same time and who knows where the price will go, gulp.