Posted on 09/05/2005 7:39:23 AM PDT by cloud8
PUBLISHING billionaire Steve Forbes has predicted that soaring oil prices will lead to a crash that could make the hi-tech bust of 2000 "look like a picnic".
Mr Forbes, publisher of Forbes magazine, said the price of oil, which peaked at more than $US70 a barrel on Monday as Hurricane Katrina headed for the US Gulf Coast, was unsustainable.
He said factors such as inflation and increased demand for oil from China and India accounted for only a small part of the price hike from $US25-30 a barrel three years ago.
"The rest of it is sheer bubble speculation," he said.
Mr Forbes, who was speaking at the opening of the Forbes Global CEO Conference in Sydney yesterday, said the higher the oil price rose, the harder it would eventually crash, creating more pain for hedge fund managers and their clients.
"I don't think it's going to go to $US100 but if it does the crash is going to be even more spectacular," he said.
"It will make the hi-tech bubble look like a picnic -- this thing is not going to last."
He predicted that oil would fall to $US30-35 a barrel within a year.
Mr Forbes's comments came as the price of oil eased following US Government comments that it could release some of its Strategic Petroleum Reserve.
The 700 million barrel stockpile is set aside for emergency use and could be used to counter oil shortages caused by Katrina's impact on the Gulf of Mexico, which accounts for about a quarter of US output.
After leaping nearly $US5 a barrel to $US70.70 on Monday, US oil futures retreated more than $US1 a barrel yesterday.
So does Jealousy and Envy.
No room for a rig in my back yard, but there are a few within 100 miles--and none of them are exactly laying in the weeds gathering rust. Rule number one in oil exploration: Drill where the oil is.
They have gotten us used to $3.00 per gallon. It will not drop under $2 unless a serious, viable new alternative energy is developed. They will keep it in the 2s regardless of market conditions as long as they possibly can.
At the other end, at the gasoline pump, demand will rise. Prices will rise. Since pump prices will rise with crude falling, profits will be enormous.
Next, consumers will get all upset and demand government control of the means of production and delivery. Sure. That always makes things better... What we need more than anything is doubling of refinery capacity, which has been suppressed by enivironmental whackos for thirty years (thank you, U.S. Congress).
Since when is a corporation making a profit "trouble"?
SJ,
I never said that they shouldn't earn a profit. Maybe you need to go read the post again. My problem is with the manipulation of the prices to create HUGE, OBSCENE profits. Every single thing that happens in the news these days means higher prices at the pump. Bad season for Hollywood this summer? Oh, well that means people will be driving more instead of sitting in theaters. Gas price needs to go up. Yep. And, BTW, if you are not sharing in these record profits, then maybe it's YOU who ought to spend a little more thought here.
I am in industry, so I do understand how profits fund further research and development. No problem with that. In fact, if it's helping us find and get more oil, even better.
So, again, my beef is with the LEVEL of the profits and the fiction that surrounds the pricing of the commodity. Oh, and you want an industry that gets more berated for their profits? I'll help you out with that one: pharmaceutical companies.
Yeah, I agree.
(This Steve Forbes guy is a commodities trader or something? Or is he some sort of a Nooo Yawk City magazine publisher?)
I'd be a lot more impressed if I had heard that T. Boone Pickens had gone short crude, and I haven't.
That makes a lot of sense.
If I recall correctly the 1970s resulted in many dormant wells in the U.S. being re-opened when oil price reached a certain level. That made a lot more sense than "speculation." At least someting was being produced. What does speculation produce, I wonder, besides bubbles and hot air?
Were the Pig Pirates in the gasoline vending business too??? Did the grandkids notice the sunflower farm over by Vacuumville??? Was there someone hanging around there tryin to tell everybody that would listen that they could squeeze enough oil outta them sunflower nuts to run yer diesel???
Glad you all made it back safe and sound without running out of petrol. (as they say in jolly ol England)(right DG?)
Over and over and over again, this must be repeated
> Mr. Forbes' prediction would gain much more credibility with me if he were to announce that he is shorting oil
Maybe he did, indirectly, via this interview.
$oreA$$ probably got out of the market or started shorting it on Wed and Thurs.
You don't know how much I'm making or what my labor is. On the other hand, the financial reports of the oil companies are public domain. And their profits are obscene.
please forward a portion of said "obscene paycheck" to: dakine.
Actually, given that the neighbors walk their dogs regularly by my house, I DO have a surplus of dog squat. I'll send that to you instead. What was that address again?
So f--king what. What do you think is driving this country and its economic engine, apples?
We picked them up at Rio Vista and drove north on 113 to 80.
Just before we got into Dixon which grows land size everyday, we saw pigmy sunflower plants about 2 to 2.5 feet tall.
The Pig Pirates are Hedgefund Traders who enjoy being Pig Pirates on the weekends.
I disagree. The average cost of drilling for oil worldwide is about $6/barrel. The Saudis do it for about $1.50. So, it can't be that hard to get.
> You a communist or something?
Watch your language, please :)
> I'm profiting from the burst in oil prices but I didn't cause the price of oil to go up.
Buying up futures with a limited supply drives up the price per barrel.
Don't leave Jimmy Carter out of the oil misery formula for Americans.
What was that address again?
235 W. 23rd Street
New York, NY 10011
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