OIL'S FUTURE PRICE IS REALLY DEPENDENT ON WHO YOU ASK

NY Post ^ | 08/24/08 | JOHN AIDAN BYRNE

[TigerLikesRooster]

OIL'S FUTURE PRICE IS REALLY DEPENDENT ON WHO YOU ASK

By JOHN AIDAN BYRNE, Post wires

Posted: 3:21 am August 24, 2008

Drivers looking for insight into how much they'll be paying at the pump this winter shouldn't look to Wall Street for any guidance - oil analysts on the Street don't seem to have a clue.

Take the gaping difference between the estimates of oil analysts at two firms - Goldman Sachs and Hong Kong-based GaveKal Research.

Goldman is predicting oil, which settled at $114.63 a barrel on Friday, will not continue its easing pattern but do an about-face and rise 30 percent by Dec. 31 to $149 on growing demand in emerging markets. GaveKal, looking at the same data, predicts oil will fall 19 percent to between $85 a barrel and $100 a barrel as production remains high.

Oil has fallen 22 percent from its July peak as US demand has slowed and production has not slowed. But no two analysts on the Street seem to be able to agree on what lies down the road.

For example:

* On China's demand for oil: Goldman, in a recent report, writes that China shows no sign of curbing consumption, noting that oil demand has increased 9.5 percent in the year to July. GaveKal reports that with Olympic preparations behind them, China has stopped importing diesel.

* On oil production: Goldman sees disruptions in supply, including Caspian production, which is down 550,000 barrels a day, because of a damaged rail link in Georgia. Meanwhile, GaveKal reports Saudi Arabia is producing at its highest rate in 26 years.

* On the affect of the US dollar on oil prices: The impact of the US dollar on oil is limited, ...

[TigerLikesRooster]

Ping!

[rellimpank]

—yeah—(with no claim to originality), predicting anything is difficult—especially the future---

[AmericaUnited]

Wow! This is a real news flash... some think this market will go up and others think this market will go down.

[detective]

“oil analysts on the Street don’t seem to have a clue.”

If these oil analysts actually knew what future prices would be they would not have to work for a living. That is why futures markets are so important. They provide producers and consumers of energy both price discovery and the ability to lock in a price. Traders and speculators provide liquidity to the market which allows energy producers and consumers to lock in a future price. The Democrats attack on the futures markets as the cause of high energy prices is one more way in which they attempt to screw up the economy.

[kittymyrib]

Goldmann Sachs has been trying to push the price to $150/bbl since June. Wonder when the congressional dunderheads will call them to testify for their attempt to manipulate the market. Since they give big bucks to Democrats, I’d guess never.

[GeneralisimoFranciscoFranco]

If these oil analysts actually knew what future prices would be they would not have to work for a living. That is why futures markets are so important. They provide producers and consumers of energy both price discovery and the ability to lock in a price. Traders and speculators provide liquidity to the market which allows energy producers and consumers to lock in a future price. The Democrats attack on the futures markets as the cause of high energy prices is one more way in which they attempt to screw up the economy.

If you kill the bogeyman, who will we blame?

[jas3]

OIL'S FUTURE PRICE IS REALLY DEPENDENT ON WHOM YOU ASK

That's much better.

jas3