Posted on 09/10/2005 2:50:36 AM PDT by wotan
CIBC World Markets has prepared a presentation (a PDF file) that predicts $100/bbl oil in two years.
CIBC is a major Canadian Bank with 37,000 employees.
I don't think so. Read something else on FR a week ago that was calling the current price a bubble.
100 per barrel says there's something uniquely different this year than 2 years ago when oil was in the 40 range. My guess is that that kind of increase would kill the economy that is providing the cash to those nations who are fueling the increased bidding for oil.
Kill the American economy and we won't be buying so much of their merchandise....and we are by far their major market.
Thanks for the info. My own opinion is that it will not go so high. However, I think for the next few years it will stay at today's levels, and sometimes edge up to $70 per barrel.
Some people say that the present oil market is a bubble, and someone from Forbes says it will be half by next year, but I don't believe that.
That was Steve Forbes, former Republican candidate for President.
That high price will then bring alternatives to the marketplace.
Doesn't matter much. I'll be riding my bike as much as possible. It may not help the US very much in getting off the Arab oil teat, but it's better than nothing.
Buy oil stocks, QED.
It's doubtful to go down much.. It's likely to shoot up again and again.
It's an oligarchy marketplace.
I wouldn't believe anything CIBC says. It wouldn't be the first time the projected their wishfull thinking. Soros wishes it would hit $100 as well, along with Maurice Strong, and a bunch of other left wing wacko's wishing to see the world economy crumble.
Too many variables to make such a prediction and oil prices are much too volatile. Predictions like this are based on the presumptions that things will be as they have been. Never safe.
So when are we going to start drilling in Colorado and Alaska?
Steve Forbes, the magazine publisher? Not Steve Forbes, the commodity trader? :D
I listen carefully to anything that T. Boone Pickens has to say, since fortunes have been lost betting against him
Boone Pickens has been quoted as saying $75 within a year and it's already spiked above $70 so I don't think $100 in two years is even a particularly brave prediction.
I don't know that the MSM has glommed onto just how bad the damage to the oil and natural gas infrastructure in the Gulf has been. I've actually heard a CNBC anchor talk about "barrels" of natural gas! (It's production is measured in cubic feet!)
So far, the U.S. Coast Guard has reported 52 platforms missing and 58 others damaged. It's a huge amount of damage, and the older platforms with marginal wells won't be rebuilt, so that production is lost forever.
Even if oil does go to $100, it may not be a good thing for the major oil companies that have to buy oil to refine. Be careful before you bet the ranch!
Don't let this worry you. As someone in the financial industry, I can tell you that Wall Street research is notoriously bad.
If more of these wirehouses start calling for $100 oil, it probably means oil will be about $45-$50.
It is all about demand.
And demand is high with China and India building roads and using cars.
Unless China has a major economic crash, which is possible, the demand will remain high - and therefore prices.
At least that's my bet...
There should be a "Breaking News" penalty for things like this. Like making all their posts in pink for a year.
They are on crack.
Speculators are driving the oil futures price on the commodities market. It would be useful to know who that is.
Thanks for posting.
I think we probably will see $100 bbl oil. And that's not necessarily a bad thing in and of itself. That translates to gasoline being about $5 a gallon I reckon. In Europe it's been over $4 a gallon for many years. Several things will happen in the longer term in the U.S. as a result:
a. People will drive smaller cars.
b. People will drive less.
c. Alternative energies that haven't been economical to pursue will become more viable. E.g. biodiesel, solar, wind, passive solar, and ethanol.
d. People will walk or bike more.
e. People will purchase better insulated and more energy efficient homes.
f. Suburban sprawl will become less attractive due to the cost of transportation.
g. In the long term and in the aggregate, we may end up spending less on oil as other non-oil technologies have the incentive to develop.
I don't see any of those things as being bad. Of course the short term will not be fun. You can pretty much plan on an economic downturn as people get squeezed by higher energy costs. People can't afford to sell their car at a loss, move closer into town, and install a solar array on their roof all at the drop of a hat. It'll take time to adjust. And in the meantime, people will have less money to spend on other stuff.
1.2 billion people in China and 1 billion in India and they all want to be warm in the winter, cool in the summer, and drive an SUV just as much as anyone in any of the G7 countries. My best guess is a gradually rising trend channel with the upper limit at about $75 and the lower limit at about $40 right now. I could see $100 on an event-driven spike within 2 years. (If one of the world oil transit chokepoints actually gets choked.)
The natural gas supply for late winter in the US really has me concerned. (Natural gas is mostly transported by pipelines, and there are only a relative few natural gas tankers, so we can't look to overseas sources to send natural gas to us.)
Tar sands and coal-to-oil are likely sources in the future, but these kinds of projects take years to develop. Katrina created a lot of big problems that aren't getting much discussion because the MSM can't see them.
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