The forecast might be right or wrong, and one might agree or disagree, but the mere fact that they SAY that they think oil demand will be at level X in Y years from now won't MAKE oil demand be that high at that time.

If they say the demand will be X (looking at XOM for the moment), and they plan for the demand to be X, then the price of oil will be Y based on their marginal addition to supply. The price of oil will be lower than if they did not increase marginal production. As such, their planning for production at X has an impact on price and will drive up demand if price is lower due to their increased production.

Therefore, increasing production to meet their forecast will increase demand as price will be lower than if they did not increase production. Conversely for BP. Not investing for future demand will result in higher prices at the margin which will lower demand.

The actions that large oil producers take does have an impact on pricing which impacts demand.

Aussi

Berkshire Hathaway FAQ

---

Contact Shrewd'm
Contact the developer of these message boards.