Very wishful thinking.
and in this corner... Goldman Sachs:
“Oil prices threaten to hit $200 a barrel in a final “super-spike” over coming months as producers fail to keep pace with blistering demand from China and the Middle East, according to a controversial report by Goldman Sachs. “
http://www.freerepublic.com/focus/search?m=all;o=time;q=quick;s=oil%20super%20spike
I’m inclined to agree with this. Note that this was published a little over two weeks ago.
The price of oil has gone parabolic. That can’t be sustained, regardless of the commodity. Price moves like the most recent, combined with non-stop coverage of it, is always bad for those that fall for it and buy in. I wonder how many green traders are getting ready to learn their first big lesson in the old pump and dump routine.
For those so inclined, spare me the “it’s different this time” babble. I heard it with the dot coms and I heard it with real estate (hmm.. diminishing supply, increasing demand, etc. were all present in real estate). A bubble is a bubble, regardless of the asset.
Now, I’m only speaking from a trading perspective. The long-term trend in oil remains up and there is no reason to expect that to reverse. However, near-term, betting against oil might not be such a bad idea.
I’m hoping it’s the early 70’s all over again. Meaning high oil prices lead to a significant drop in gasoline demand leading to a drop in prices. Although it hurts, I like to see two stages. The one with $3 to $4 gasoline and $100/barrel oil leads to R&D, new alternatives and infrastructure development (oil sands production and new pipelines for wider distribution possibilities) and another brought on by a move to higher mpg vehicles.
End result is fewer bucks for oil producers.
I just wonder if all the oil speculators are also Opec members?
Ping this article to Canada. They are the largest importer of oil to the USA.
The article is dated April 25. Two-week old analyst forecasts are very old news.
I agree, oil is overblown and should make a blow off top. Then there is the Iranian situation. Just when you thought it couldn’t go any higher.
If there is really a shortage, why aren’t there any lines?
Gee, how bad is it when $70 a barrel looks good?
Now they could be looking to get out [of oil funds], warns Waldron. He figures the money effect has driven anywhere from $20 to $30 into the barrel price.
No doubt speculators are easily adding $30 to a barrel.
New refineries won’t solve the problem. Crack spreads are already low, telling us that is not where the problem is. Inventories are near five year lows (that’s OECD inventories on a days supply basis) despite the high prices. Geology is trumping economics for now.
Rumor is that Russia’s production will decline over the next year. They were down in the first quarter, first time that happened in over a decade. They say things will ramp up later in the year. The Russians have been the only real source of non-opec production growth. If they do peak this year, my guess is we’ll see $200 this year.
$120 a barrel says more about how this government supports the dollar than it does about the value of oil.
It’s different this time and I’ll tell you why.
John McCain is against new drilling and new refineries.
Why he says? Because “I’m an environmentalist!”
The real answers are to go nuclear (on this, and perhaps only this, the French are right,) and to open ANWR and the central Gulf of Mexico by giving explorers maximum tax incentives.
As to the enviros’ objections: hit ‘em with SLAPP and RICO suits rooted in national security considerations. Toss any who defies the suit in jail—the price for their obstructionism and outright treason.
Wouldn't surprise me. We've cut our driving by at least 15 percent. Multiply that several million times.
I don’t think we’ll get $200 oil this summer like some have said. The Euro seems to be weakening slightly against the dollar after six years of dominance. And the Fed signaled that they would not lower interest rates immediately after the last cut because inflation is looming.