15 March 2016

The blindingly obvious #nlpoli

After all this time, it remains an enduring mystery how a guy who held himself out to be the great seer of oil prices still gets quoted on oil prices despite the number times he has fundamentally gotten it wrong.

Some local reporters still use Wade Locke as the go to guy on oil.

Here's a sample of what passes for insight in Newfoundland and labrador these days.  These quotes are from a recent piece at CBC by Terry Roberts:

"It's always been the case that at some point, demand would start to swamp supply."
"At some point in time demand will significantly exceed supply and prices will have to rise well beyond $50 as well. But again that's only a matter of time, and a matter of exactly when."
Just as there is a 50/50 chance of anything occurring - it either will or it won't - so too is it likely that, over time,  the demand for any commodity will swamp supply.  The result - inevitably - would be that prices would rise.

This is Economics 1001 kinda-stuff.

It's only a matter of time.

It is only a matter of when.

When could be tomorrow.

Or it could be a decade from now.
The thing for folks in government, having some idea about where prices are going can mean the difference between a massive surplus or, as in the more recent times, massive deficits.

Having insisted shale was nonsense and that oil was about to skyrocket any day now,  Wade is a wee bit more shy these days since those other predictions didn't pan out.

"I was one of the guys suggesting to government a couple of years ago use $105 (a barrel in preparing a budget), " Locke told Roberts.

"I don't have any pretension that anything I say with respect to oil prices has much in the way of precision."

Wade never actually had much precision, but at least now the old boy has given up the pretense.