Zenph

An energy update before Zenph.

 

As I predicted a few months ago when oil was pushing $150/bbl, we would see prices return to the $90-$110 range by end of summer. U.S. oil traded today at $107. Still wickedly expensive and indicative of limited supply, but better than $150. 

 

Two reasons for this softening – speculation and demand.

 

The recent oil surge was largely a speculative bubble. Markets can only sustain speculative bubbles for so long. Over time, fundamentals (supply, demand) dictate value. 

 

Historically high oil costs have also reduced OECD demand. It’s looking like this “demand destruction” is the deepest we’ve seen in 25 years, with U.S. oil use down 1.3% over 2007. High energy costs are forcing basic shifts in consumer and industrial behavior. Frankly, I would have expected even greater demand destruction than 1.3%. (non-OECD demand – China – remains stronger, with net demand up over 2007). 

 

Keep in mind – oil supplies can be artificially constrained. OPEC (Venezuala, etc.) has stated off-the-record that they will try to maintain prices above $100/bbl. It’s looking like we’ll be living in a world of $100 oil (on average) until we again start rubbing up against the next wave of supply/demand limits (peak oil theory).

 

The main point of this: energy dictates economic activity (unemployment reached a 5-year high today), which over time impacts everything else (populations, stability, etc.). The faster we can untie ourselves from fossil energy, the better: for our kids, our planet, and our survival. I don’t want my son, and the sons of millions of fathers, fighting in an oil war.

 

…………

 

My friend John Walker has been working on ways to duplicate live musical performance from artists’ recordings. He uses my audio hardware along with his brilliant audio software to achieve results that only a few years ago would have been impossible. His company is called Zenph and you’re going to be hearing a lot more about it.

 

I was happy to discover this week that TED is now showing a video of John Walker demonstrating his invention. It’s a 13 minute presentation – I encourage you to watch/listen as jazz legend Art Tatum is brought back to the concert hall in real-time.


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