Rogers: Oil to $100 After ‘Correction’

MoneyNews.com (Newsmax) ^ | January 19, 2007 | Marie Albin

[Tolerance Sucks Rocks]

Commodities expert Jim Rogers says that, while he can't pinpoint the exact timeframe, oil will reach $100 a barrel after a "correction." Readers will remember that Rogers predicted the start of the commodities rally in 1999.

"I'm just not smart enough to know how far down it will go and how long it will stay, but I do know that within the context of the bull market, oil will go over $100," Rogers said in a Tokyo interview. "It will go over $150. Whether that is in 2009 or 2013, I don't have a clue, but I know it's going to happen."

Currently, MoneyNews' sister publication Financial Intelligence Report is forecasting that oil will fall to as low as $40 a barrel.

Crude oil has fallen as much as 36.4 percent to a 20-month low since hitting a peak of $78.40 a barrel in mid July. Crude dropped to a low of $49.90 a barrel yesterday and has since rebounded to around $52 today. A 20 percent decline generally indicates a bear market.

But Rogers says the fundamentals for $100 a barrel oil are still very much alive. There hasn't been a major oil discovery in 30 years and economic growth in China and other Asian countries is boosting demand for oil, he says.

Rogers says the current correction in oil prices is to be expected.

"When you have big bull markets, 50 percent corrections, or retractions, are normal," he said in an interview yesterday. "It has often happened throughout history in a bull market."

Rogers pointed out that the gold bull market in the 1970s experienced a two-year correction before resuming.

"Corrections go down long enough to scare everybody out and make sure they give up, and then they turn around," he said. "We are in a secular bull market for commodities which has another decade or two to go."

On a side note, Rogers also revealed that he's holding airline shares, a strange investment given his prediction that oil will rebound to $100 a barrel. But the move is paying off.

"The only airline where I'm losing money in the last year is Japan Airlines," said Rogers.

Financial Intelligence Report, in its latest edition of "The Four Ways to Profit from the Oil Bust of 2007," recommends our favorite airline stock. To get your free copy, go here now.

© NewsMax 2007. All rights reserved.

[Arthalion]

But in today's dollars, no, it's not going to go to $100 and stay there for any appreciable amount of time, because it's just not sustainable.

Sure it is, it will just force a technology change to deal with it. If you spend $50 to put 20 gallons of gas in your SUV to drive around for a week, or spend $50 to put 5 gallons in your hybrid plastic minicar to drive around for a week, the economic impact is the same. The price appreciation simply needs to be slow enough to permit the transition from one technology to the other. It WILL be unsustainable for those who insist on commuting to work in Ford Excusions, but I'd pony up a decent bet that there won't be many of those people around once gas passes the $5 a gallon mark.

[Doc91678]

If there is a Democrat in the White House he or she will more than likely blame Bush.

[RightWhale]

It seems like a comnplicated world with all this information flowing back and forth and nobody to fact check most of it. Just look at the primary gasoline price fallacy. Even though data does not support the price latching mechanism but rather a price subduction, the fallacy continues to be voiced by nearly every poster who bothers to mention the price at his local retail outlet even on crude oil threads. Most do not even know there is a dative case in the language.

[Pete from Shawnee Mission]

Inflation is the constant devaluation of your money that occurs when the government (Fed reserve) prints too much money. It is a hidden tax, with the difference going to the government. Crypto tax, or inflation, is, in your example, $23.

[TKDietz]

How do you know what he's basing his predictions on? My bet is that we really will see prices go that high in the coming years, probably even within a decade, not because I think we're about to run out of oil, but because there are fluctuations in commodity prices with prices going up and down and the highs tend to get higher as time go on. Moreover, the oil markets are not exactly stable now and there isn't much stability in sight. We're liable to see some huge fluctuations in price in the next few years. Could the price hit $100 a barrel, $150? Could very well be, especially if we see a lot more war in the Middle East. Will prices stay that high long? That's doubtful, but they could hover up a good bit higher than they are now for a long time and the overall trend in all probability will be up as world oil demand continues to grow and remaining reserves continue to get harder and more expensive to find, pump out of the ground and refine. General inflation and these other factors will bring the price of oil up.

[Star Traveler]

You said -- "I report. Words drift through the air and I take note, usually from the radio. You never hear this stuff on TV. A word here, a word there, and a picture begins to take shape. I do not make stuff up; somebody else runs that department."

Then, let me report something to you, that you can pass on -- later. I predict that by 2050 oil production wil lbe at 250% of where it is today. Now..., be sure to report that, along with the other report.

And, by the way, does that take into account that Iraq has reserves that rival all the known reserves of Saudia Arabia and that they expect to find more? I was just wondering if that was factored into that 10-20%.

Also, did this report "factor in" that the U.S. has 150% of the total known oil reserves in the *Middle East* -- right here in this country -- getting ready to be developed out of shale oil? I was just wondering if that was factored into that prediction, too?

Well..., be sure to pass along my prediction, now -- wouldn't want you to be discriminating in a way to "slant" the story...

Regards,
Star Traveler

[Star Traveler]

You said -- "Yeah, $100.00 oil. Someday, like when a Big Mac is $20.00."

And when the average common man's paycheck is about $15,000 a week, too...

Regards,
Star Traveler

[RightWhale]

Your predictions are already right out there. No need to repeat.

[never4get]

"Crude oil has fallen as much as 36.4 percent "

At the pumps, at best, the prices in my area have dropped about 20% to 25%....

[thackney]

Since gasoline didn't rise as much as crude oil, you should not expect it to fall as much either.

After all, crude oil only makes up a portion of the price, although it is a large portion.

[capt.P]

My own bet is that this guy is getting burnt on futures, and is trying to drum up a little surge to offload his investment.
Any takers?

[Tolerance Sucks Rocks]

That's WAYNE Rogers.

[Diana in Wisconsin]

"My bets on Silver."

I'm with you; me and my 16,000 ounces. :)

[woofie]

as an oil and gas producer I like the idea

[samadams2000]

Geez...thats large. Nicely done.

[cynwoody]

Should we check with Soros? He controls the price of oil (when it goes up).

This guy is a former business partner of Soros. They cofounded the Quantum fund.

[M. Espinola]

"Now in the commodities business, he is something of an icon. He rode a Harley across China AND Russia with his girlfriend quite few years ago, which it just amazing knowing the conditions at that time. He doesn't invest in companies, he invests in COUNTRYS. He could probably write a check that would bounce your BANK. And you call him an idiot? I'm sorry, but did you even -think- before you posted that?"

What you stated is well worth repeating.

It's blatantly obvious those foolishly attacking Jim Rogers have no idea of his style of trading, nor his track record, never mind the intricacies of active, daily commodity trading.

Jim Rogers energy related projections are even more realistic if one throws in the inevitable showdown with the likes of Opec's Iran...need I say more(?)

I have two additional commodity projections, go long & bullish on corn and orange juice :)

[Diana in Wisconsin]

Dad and I have been playing "The Commodities Market" since I was a teen. We started out on paper, then tried cocoa, rice, lumber, pork bellies *SMIRK*, etc. when I had real money to invest. He did a lot of research into silver and his theories are pretty sound, IMHO. We've also done well in real estate. It's pretty easy in the Midwest; prices stay within normal range, versus speculating on the coasts.

He's been a great teacher. He's a Christian version of Ben Stein, LOL! I'm a lucky girl to have had a Dad like that. Not many women know what to do with their hard-earned money, which is an outrage!

And I have a husband whom I love dearly, but he is a total Spendthrift. His Life Theory is, "It's Only Money. I'll Make More!" So, I need to protect my assets for the future as statistically, I'll outlive him. And if not, he'll be playing the role of 'The Wealthy Widower' with the neighbor ladies plying him with casseroles and other "goodies" and I won't know the difference, LOL!

[alrea]

Read that he started with $600. Rogers is a true Market Wizard.

[gogogodzilla]

Coal gasification and thermal depolymerization produce oil at significantly cheaper prices than $100/barrel.

And America has one of the largest supplies of coal in the world.

Not to mention that nuclear power is also significantly cheaper (though you can't fill up your tank on it).

And let's not forget that geothermal and hydro power is essentially free once you recoup the initial construction costs. (Course, it's not available everywhere)