Oil could reach $300 per barrel, says expert

Oil could reach $300 per barrel, says expert

www.arabianbusiness.com

Oil prices could top $300 per barrel within the next five years, according to one industry expert.

Matthew Simmons, chairman and founder of specialised energy investment banking firm, Simmons & Company International, said the current highs of $100 per barrel are "cheap".

"I think the supply is showing some very troubling signs that we might well have already peaked and started [to slow] down. If we haven't, we are very close to it," he told Arabian Business. "Demand on the other hand shows absolutely no sign of slowing down because we are now at $100 a barrel, which I still think is a preposterously cheap price. It works out at just $0.15 a cup.

(visit the link for the full news article)

Awesome! Pretty soon we'll be paying $15 dollars per gallon at the pump, and we'll all be riding bicycles around. If I had a dime for every time I heard one of these 'experts' talk about how 'cheap' oil is, I'd be as rich as those thieves at OPEC.

I don't doubt it's going to be $300, as our dollar is literally becoming worth less than the peso now.

www.arabianbusiness.com
(visit the link for the full news article)

reply to post by DimensionalDetective

$300 oil would crash the economy and no one would have the money to buy it. So that makes his assertions irrelevant.

He's probably one of the guys rolling in dough because of the high oil prices and he's dreaming of ever greater riches.

Trouble is, higher prices tend to reduce demand and bring the prices back down again.

reply to post by DimensionalDetective


That rickshaw business I was thinking of investing in is looking better and better!

They are trying to turn us into a third world country and it looks like they are successfully accomplishing that goal!

[edit on 28-2-2008 by realmatrix]

reply to post by DimensionalDetective


Another example of the greed that has taken hold of this nation and its government, is not control, no control and regulations that can favor the American hard working citizen.

As job grow keeps becoming stagnant and this corrupted elite keeps profiting, very soon they will be the only ones to afford the gas in this nation.

Then what?

Looks like the "peak oil" myth has been dragged out again. Anything to justify price hikes.
Quoting prices of $300/barrel is just a way of softening the blow...believe it or not. When it reaches only $150-200 the public will think. "Boy we are lucky...they predicted $300....."
Its a relative thing.

I personally can't wait until it does reach $300 a barrel, heck, why not more? I hope I live long enough to see the oil just plum run out and force society to rethink its ideals and processes. We're burning the stuff faster than it can pumped out of the ground, yet peak oil is a myth? Surely everyone knows oil is a finite resource that is going to run out one day.

The American dollar is the ugly fat kid at the moment. It's worth $1.52 Euros, and this morning the Australian dollar is worth just above US$0.94 (for comparison sakes, that's the highest our dollar has been in over 20 years). Maybe it's not oil that is becoming more expensive, it might just be the beleaguered US currency.

I don't understand your post about the dollar, you know that the dollar is been in decline.

Dollar to slip into steady decline as expert paints a bleak picture

www.independent.ie...

Perhaps I miss something from your post.

reply to post by marg6043


Oh yeah, it's just my general observation that other currency is doing somewhat better than the US dollar. The Euro is worth 50% more, for instance, and there's talk that the Arab countries would rather like to deal in Euros than the US dollar.

[edit on 28-2-2008 by mattguy404]

Sorry Mattguy,
Peak oil is in fact inevitable, but I dont think we are there right now is what I meant to say.....

Originally posted by DimensionalDetective


Awesome! Pretty soon we'll be paying $15 dollars per gallon at the pump, and we'll all be riding bicycles around. If I had a dime for every time I heard one of these 'experts' talk about how 'cheap' oil is, I'd be as rich as those thieves at OPEC.

I don't doubt it's going to be $300, as our dollar is literally becoming worth less than the peso now.

www.arabianbusiness.com
(visit the link for the full news article)

I say bring it on! You give me $200-300 dollar gasoline, you will have an alternative energy by 2015 at the latest!

I see, I guess I read the post wrong, I agree with you, so far Saudi had done just a partial change of currency, but if the Oil rich Arab countries dump the dollar completely our economy will collapse.

Funny but sometimes I feel that the current oil hike is to push alternative fuel but not for the benefit of us the consumers but rather for the profit makers.

reply to post by VIKINGANT


That's my general feeling too. Some people say 10 years, some people say now, some people say 100 years, some people say 30 years ago. Drilling in Alaska might stave it off for another few years, for instance. When it does happen, it won't be a nice little peak, I'm guessing it will be an all-out shock. APEC countries are notorious for saying they have more reserves than what are actually in the ground, even as they're pumping water down in the oil wells to force up the oil.



[edit on 28-2-2008 by mattguy404]

reply to post by DimensionalDetective


First off there is no reason to expect a significant decline in the value of the US dollar with respect to any other currency because this is a global issue, not a US one.

Second, the mistake is forgetting that there are alternatives to oil. North America alone has more coal resources than would be required to supply all of our energy needs for 250+ years. Coal can be converted to synthetic oil (that burns much cleaner than natural crude) at $55 a barrel. That price includes the cost of coal ($20) plust the investment needed to develope the infrastruture, the cost of money, and the cost of labor.

In short, if natural crude is going to cost $300, it will be replaced by far cheaper synthetic oil, or other alternatives.

A further example is that if you neglect the oil imported from Mexico and Canada, 100% of the remaining oil imported by the US could be eliminated if the US converted passenger vehicles to plug-hybrid cars.

Don't get me wrong, there will be plenty of crazy stuff that happens before the world coverts from a oil based economy to other sources of power, but we shall survive.

I have seen a few articles on the $10 or more gas prices and the effects. Do people honestly think its going to be a minor problem?

If gas prices in the USA get the high.....It will make the Great Depression look like a mild slowdown. The US economy runs of gas and our lifestyle is controlled by gas. Think of the trickle down effect on this. Its downright scary.

People won't be able to pay their bills or go to work......businesses all over start to suffer.....unemployment skyrockets.....It will be the worst domino game ever.

Am I being Crazy to think it would be that bad???

looks like bumper profits to oil companies and the oil investors
and of course if this happens i can see gordan brown smiling with the amount of Tax the fudging sob gets from oil tax.

the US pays ways less for gas/petrol and so on
so whats the point complaing at the fact that americans will soon have to live up to the fact that they wont be getting shelterd prices for that much longer.

i say shelterd because if you look at prices at pumps in the uk/europe to US there is a big diffrence.

They want us to think that peak oil is here because all it does is make them richer. I don't think it is here now, but it WILL be here one day soon. Maybe now we will seriously start thinking about alternate energy sources. If we had been as smart as Brazil was back in the 70's, we wouldn't be dependent on OPEC now.

Before any of you willingly throw yourselves under that peak oil bus, you should at least consider the following 2 part article....


Part I: Link

Perhaps 60% of oil prices today pure speculation

Goldman Sachs and Morgan Stanley today are the two leading energy trading firms in the United States. Citigroup and JP Morgan Chase are major players and fund numerous hedge funds as well who speculate.

In June 2006, oil traded in futures markets at some $60 a barrel and the Senate investigation estimated that some $25 of that was due to pure financial speculation. One analyst estimated in August 2005 that US oil inventory levels suggested WTI crude prices should be around $25 a barrel, and not $60.

That would mean today that at least $50 to $60 or more of today’s $115 a barrel price is due to pure hedge fund and financial institution speculation. However, given the unchanged equilibrium in global oil supply and demand over recent months amid the explosive rise in oil futures prices traded on Nymex and ICE exchanges in New York and London it is more likely that as much as 60% of the today oil price is pure speculation. No one knows officially except the tiny handful of energy trading banks in New York and London and they certainly aren’t talking.

By purchasing large numbers of futures contracts, and thereby pushing up futures

prices to even higher levels than current prices, speculators have provided a financial incentive for oil companies to buy even more oil and place it in storage. A refiner will purchase extra oil today, even if it costs $115 per barrel, if the futures price is even higher.

As a result, over the past two years crude oil inventories have been steadily growing, resulting in US crude oil inventories that are now higher than at any time in the previous eight years. The large influx of speculative investment into oil futures has led to a situation where we have both high supplies of crude oil and high crude oil prices.

Compelling evidence also suggests that the oft-cited geopolitical, economic, and natural factors do not explain the recent rise in energy prices can be seen in the actual data on crude oil supply and demand. Although demand has significantly increased over the past few years, so have supplies.

Over the past couple of years global crude oil production has increased along with the increases in demand; in fact, during this period global supplies have exceeded demand, according to the US Department of Energy. The US Department of Energy’s Energy Information Administration (EIA) recently forecast that in the next few years global surplus production capacity will continue to grow to between 3 and 5 million barrels per day by 2010, thereby “substantially thickening the surplus capacity cushion.”

Part II: Link

As detailed in an earlier article, a conservative calculation is that at least 60% of today’s $128 per barrel price of crude oil comes from unregulated futures speculation by hedge funds, banks and financial groups using the London ICE Futures and New York NYMEX futures exchanges and uncontrolled inter-bank or Over-The-Counter trading to avoid scrutiny. US margin rules of the government’s Commodity Futures Trading Commission allow speculators to buy a crude oil futures contract on the Nymex, by having to pay only 6% of the value of the contract. At today's price of $128 per barrel, that means a futures trader only has to put up about $8 for every barrel. He borrows the other $120. This extreme “leverage” of 16 to 1 helps drive prices to wildly unrealistic levels and offset bank losses in sub-prime and other disasters at the expense of the overall population.

The hoax of Peak Oil—namely the argument that the oil production has hit the point where more than half all reserves have been used and the world is on the downslope of oil at cheap price and abundant quantity—has enabled this costly fraud to continue since the invasion of Iraq in 2003 with the help of key banks, oil traders and big oil majors. Washington is trying to shift blame, as always, to Arab OPEC producers. The problem is not a lack of crude oil supply. In fact the world is in over-supply now. Yet the price climbs relentlessly higher. Why? The answer lies in what are clearly deliberate US government policies that permit the unbridled oil price manipulations.

World Oil Demand Flat, Prices Boom…

It is important to note that the real players in world oil pricing may not be the the "usual suspects".

reply to post by AWingAndASigh


Hmm, is that why prices have continued to rise even though demand has dropped recently?

Oil is a necessity, not a commodity. It doesn't fit into the free market, nor does it follow it's rules. There is no equilibrium.

[edit on 22-5-2008 by Sublime620]

reply to post by SystemiK


You are correct. Speculators are a huge problem in the current price of oil and are creating a false "shortage" for the purpose of increasing the prices. It sounds similar to what happened in the 70's. Still the fact remains that we will run out of oil one day, I just don't think it is as soon as they are leading us to believe.