Is Oil Heading For $100? (Why has Wall Street missed it so badly?)

Forbes ^ | 10.19.04 | Dan Ackman

[valkyrieanne]

Let oil prices go high enough, and oil will be about as economical as whale oil is today. The higher the cost per barrel, the greater the economic incentive to find alternatives. The Arabs think they're playing a clever game, but they're going to price themselves right out of the game, eventually.

[RFT1]

And the logical end conclusion of this will be a US that is no longer a Free Republic(it has been in decline since LBJs Great Society programs) into a European Style Social Democracy with the social unrest of a Brazil.

[oceanview]

I don't think the arabs are playing this game now. but we will know after the election, if indeed $10-15 in speculation is quickly driven out of the price, and it gets down to $40, things will settle down.

[antaresequity]

Soros may be buying contracts, but he is just another fish in a black ocean full of sharks and parasites.

Driven by lackluster equities markets and less than a robust investment banking climate, many large institutions, banks and hedge funds are piling into the oil speculation game.

All of this new money is driving the market up, and physical hedgers are being eclipsed by the new black gold rush.

Some firms such as Morgan Stanley have even gone as far as to make preparations to actually take delivery on the contracts, renting warehouse space to store their booty. (Probably a scam to drive more fear into the market...never actually intending to take delivery).

George Soros has an estimated net worth of between 7 to 11 Billion, depending on who you believe.

United States oil consumption in 2003 was approximately 20 Million barrels of oil per day. At todays price that is 1.1 Billion dollars a day.

World oil consumption in 2001 was about 75 million barrels per day...and I am sure its higher than that today. At todays price thats about 4.125 Billion dollars a day in 2001.

George Soros in his wildest dreams couldn't skew the oil market if he tried...even if he threw 50% of his net worth at the market each day in 5% increments, he would exhaust his trading account in 10 days, and at best(worse) have only a marginal effect and a short lived one at that. Further he would be on the wrong side of the trade that heavy long if things pull back...

George Soros might be an A$$hole...but he is not an idiot.

If Bush announces renewed drilling in California, the Gulf and new drilling in ANWAR, watch oil fall like a drake mallard full of nickel #2's at 30 yards hit with a full choke.

[narses]

Soros has assembled a cabal of billionaires to take out the President.

[Kaslin]

Jinx yourself. The president will be reelected. Whether you like it or not

[Dog Gone]

Greenspan manages quite a chunk

Greenspan doesn't manage anything except Fed monetary policy which is what he was hired to do. What are you talking about?

[razorback-bert]

$100/bbl oil before 1990

In 1981 everyone in Houston was saying $72 in 82 and then came the bust.

[LibertarianInExile]

Whether I like it or not? Back away from the anger, compadre. I said 'jinx jinx jinx' because I didn't want the fact that you said it to make it NOT come true. Silly superstition. Not disdain for the idea of reelecting Bush, which I'm all for.

[AdamSelene235]

Soros has assembled a cabal of billionaires to take out the President.

Funny how he's bidding up copper, aluminium and propane as well.

[oceanview]

that's right - it takes a recession to break oil prices, and if this oil prices holds, that's what will happen this time.

[narses]

Propane is a related commodity. The others haven't risen the same way (overlay the charts), they represent the decline in the dollar and the robust world demand for them (that dratted strong economy).

[SierraWasp]

Japan's market dropped 1% tonight on fears the Chinese economy is slowing down, according to CBS.MarketWatch.com.

[Honestfreedom]

Especially in the case of natural gas. When liquified natural gas becomes more common it will help the supply demand situation. Drilling in ANWAR and nuclear power would have significant impacts also.

[SierraWasp]

"and propane as well."

That billionaire bastard better leave my propane prices the hell alone!!! Now it's gittin personal!!!

D.G., it's good to see you on this thread!

[stylin_geek]

Yeah on that. I don't like the cost to my pocketbook, but the long term effect is renewed interest in different enery sources. However, it also makes Changing World Technologies look pretty good, too. See their page, here.

[eno_]

The US dollar is experiencing 'hyper-inflation' with energy prices, and could certainly turn into another peso as a useless marker of value. Manufacturing and programming jobs are feeling. Wage deflation is happening, bigtime.

If we don't counter this, it might be $5 a gallon for gas, and the wages around $10 an hour.

This is the worst case of course, but we must be prepared for it. Outsourcing of all industries will deplete the USA of wealth. The higher gas prices are a sign.

That would only be true if oil prices are not up worldwide. Everyone is in the same boat w.r.t. the price of oil.

Also, what you say about global sourcing is nonsense. I and my shareholders are more wealthy because people in India do menial programming at $10/hr. We can make more products, and sell them in more markets worldwide, because we can get more done sooner and cheaper. If you complain about programmers in India, you should also balance that with the fact we sell those Indian programmers' work in Asia, Europe, and South America.

[eno_]

and on and on---all pointing to the Bibical Prophecies of 'end times' and the world turmoil that will take place--God still Rules in the affairs of men!--no one has to believe but it will take place (and right on the Lords timetable)

Ask a Seventh Day Adventist how overdue the End Times are. The End Times are always scheduled to arrive within the lifespan of a sect's founder.

[HamiltonJay]

No, time to just buy a VW TDI and get 50 MPH without all the extra batteries and costs.

[painter]

"If Bush announces renewed drilling in California, the Gulf and new drilling in ANWAR, watch oil fall like a drake mallard full of nickel #2's at 30 yards hit with a full choke."

...and all would be left is a ball of feathers!