For the last week, I've been finding free copies of the Wall Street Journal outside my door, and it is an interesting read, if you ignore the opinion section. Various articles note the price of oil advancing to $73 before retreating, but there is no recap of the, "unauthorized buying" scandal that accompanied the advance. If not for reading Whipple's Energy Briefs, I would never have known that the largest oil trader gamed the market.

Yesterday the WSJ repeated much of what was in my Greater Transparency post. Today the lede is that OPEC will be spending less money on searching for new oil. Other articles mention OPEC cutting prices and the retreat to $60/bbl. The rally to $73 is characterized as a chimera brought about by over-enthusiasm for green shoots and economic recovery. Lack of increase in demand and the glut of distillates are again blamed for lower prices, but there are hints that the retreat might also be tactical in the face of greater regulation.

OPEC Forecasts Cut in Oil Investments as Demand Falls

The downward revision is likely to raise new concerns among oil consumers -- first and foremost the International Energy Agency, which has warned that reining in spending on oil-development projects could lead to a supply crunch by 2013. The IEA, which coordinates policies among energy-consuming nations, said in a May report that $170 billion of investment had been delayed or canceled in OPEC and non-OPEC nations.
...
The new assessment, however, drives them to opposite conclusions. IEA Executive Director Nobuo Tanaka reiterated in June that "huge investment is needed" to meet future Asian demand. William Ramsay, director of energy geopolitics at the French Institute of International Relations, who was deputy executive of the IEA until last year, said OPEC is "overreacting but understandably" because of the economic climate.

The real story, in my opinion, is that OPEC sees no growth in the OECD countries, the Industrialized or Wealthy nations, as far out as 2030. That means they don't see America and Europe climbing out of recession, contraction, depression, or whatever you choose to call it when, every month, thousands more lose jobs that aren't being replaced elsewhere in the economy.

After the fresh bite of the recession and of U.S. and European energy-efficiency laws, OPEC says growth in oil demand in developed countries is now over. In industrialized nations, oil demand is expected to fall continuously through 2030, after reaching a peak in 2005, OPEC said.

Emerging markets, particularly China, however, will make up for the decline.

Recovery will gather momentum only gradually, with the economy starting to emerge from the recession by year-end, but normal growth won't return until 2012, OPEC said. The statement is at odds with a view held by some in the market that stimulus plans will soon make the economic meltdown history. "The possibility of a lengthier global recession cannot be ruled out," OPEC warned.