The battle between oil producers and the consuming nations is becoming ferocious. Note how one day the price for crude is down $3.00 and the next day it is up a like amount. Yet, the supply/demand relationship in total is not changing. Only the geographic areas of consumption is changing as the developed world is reducing consumption as the emerging world increases their consumption.

In the United States, the historical largest consumer of oil, this new dynamic is particularly obvious. As oil is priced in US$, the increases in oil are particularly onerous due to the weakness in the US$. The US$ has weakened about 27% relative to the hard asset nations. Of course, Canada is one of these nations.

This, due to supply, demand dynamics is bound to continue until such time as alternative forms of energy are brought to the fore. That will ultimately happen. But not tomorrow due to the incredible lack of preparation and planning of the non petroleum producing nations. Foremost of which is the US!

Brian