Oil's perfect storm may blow over

[BERIGAN]

http://www.telegraph.co.uk/money/main.jhtm...22/ccoil122.xml

[sidewinder]

"Goldman Sachs has warned that prices could reach $200 in a final spike, and even the bears at Lehman Brothers say there may be enough momentum to keep the boom going until Christmas".

More pain ahead I'm afraid, methinks..

[connoisseur series500]

Looks like we've hit a temporary bubble. Perhaps investor's should stay long on oil in the long run, but it looks like speculators have driven the price over the last few months. We have to be due for a pullback. Even if the supply side doesn't change much, lower demand should force prices down as people reduce oil consumption.

[Guy Berger]

Looks like we've hit a temporary bubble. Perhaps investor's should stay long on oil in the long run, but it looks like speculators have driven the price over the last few months. We have to be due for a pullback. Even if the supply side doesn't change much, lower demand should force prices down as people reduce oil consumption.

I don't really see global demand for energy going lower. Its rate of growth will probably slow (are China and India really going to grow at 10% per year when oil is at $xxxxx per barrel?) but that doesn't imply a fall in demand, just (at best) a stabilization.

I am not sure I believe the bubble story, though it is certainly possible

Guy

[sidewinder]

Looks like we've hit a temporary bubble. Perhaps investor's should stay long on oil in the long run, but it looks like speculators have driven the price over the last few months. We have to be due for a pullback. Even if the supply side doesn't change much, lower demand should force prices down as people reduce oil consumption.

You could be right. No doubt after the US have had their RV vacations and the Chinese subsidies are pulled, reality will kick in again. Hopefully..

[Big Al]

lower demand should force prices down as people reduce oil consumption.

Traffic around here hasn't declined as a result of higher gas prices, so I can't imagine the demand for gas dropping anytime soon. People are still buying those GD gas-guzzlers, despite their whining about the high gas prices.

China and India have growing economies which require oil, so their demand isn't going to drop anytime soon, either.

[AllenLowe]

can't stand the free ride big oil gets, as though these prices are someone else's fault - who markets and sells the stuff all over the world? They do, and they can influence the price at all levels due to vertical integration; they blame it also on lack of off-shore drilling, but they were given huge bonanzas during the Carter and Reagan years, allowed to drill as much they wanted, and they robbed us with deals that permitted a basic fee for rights and low royalties for oil that was on PUBLIC land - instead of the other way around, which would have been more equitable, considering that the stuff belongs to the earth, is a natural resource, and that any related proifits should go back to the peope who live here -

Edited May 22, 2008 by AllenLowe

[Dan Gould]

People are still buying those GD gas-guzzlers, despite their whining about the high gas prices.

Not according to the news reports I've seen. SUVs and trucks are tougher to move off the lot, and more of them are showing up for trade toward smaller, more efficient vehicles.

[porcy62]

People are still buying those GD gas-guzzlers, despite their whining about the high gas prices.

Not according to the news reports I've seen. SUVs and trucks are tougher to move off the lot, and more of them are showing up for trade toward smaller, more efficient vehicles.

Correct, but it will need energy aka oil in order to produce smaller, more efficient vehicles. I agree with Guy on this, oil will reach a stabilization, probably around 180/200 $.

[JSngry]

People are still buying those GD gas-guzzlers, despite their whining about the high gas prices.

Not according to the news reports I've seen. SUVs and trucks are tougher to move off the lot, and more of them are showing up for trade toward smaller, more efficient vehicles.

But dude, we're in Texas, where Reality comes to get away from itself!

[Dan Gould]

People are still buying those GD gas-guzzlers, despite their whining about the high gas prices.

Not according to the news reports I've seen. SUVs and trucks are tougher to move off the lot, and more of them are showing up for trade toward smaller, more efficient vehicles.

But dude, we're in Texas, where Reality comes to get away from itself!

I was thinking this might be a Texas thang.

[JSngry]

Most definitely. Backing out of a parking space in a regular car has now been declared a Non-Coverable Act Of Willful Individual Foolhardiness by 78.9% of all Texas insurance companies....

[Big Al]

I rest my case!

[Guy Berger]

can't stand the free ride big oil gets, as though these prices are someone else's fault - who markets and sells the stuff all over the world?

I am not an expert on the oil industry, but how much oil does "big oil" actually own? Most reserves are in countries that have nationalized their oil industry.

Guy

[AllenLowe]

they are vertically integrated and control the sale and marketing - if they wanted, the prices could be drastically reduced - not to mention how much direct production and drilling they do - as in the offshore USA -