It's official: The Oil Boom Is Over

[cute fuzzy bunny]

I always like experts who make lots of predictions all over the place and reverse their opinions with regularity. I guess after a while they can pick whichever prediction they made which eventually came true.

I'll bet Bill Gross is still holding the "I was right!" press release for when the Dow hits 5000.

[Notmuchlonger]

Quote:

Originally Posted by cute fuzzy bunny I always like experts who make lots of predictions all over the place and reverse their opinions with regularity. I guess after a while they can pick whichever prediction they made which eventually came true. I'll bet Bill Gross is still holding the "I was right!" press release for when the Dow hits 5000.

Yep eventually they will be right if you make enough predictions.

[Leonidas]

All true, but my boy T-Boone is a billionaire. So, whatever his public prognostications, in private he seems to do quite nicely.

[haha]

Quote:

Originally Posted by Leonidas All true, but my boy T-Boone is a billionaire. So, whatever his public prognostications, in private he seems to do quite nicely.

Yes, I would say Mr. Pickens is lotsa cattle, who cares about the hat. And almost all of his substantial fortune was made speculating on oil and gas and related equities, after he was well past age 65. He can't be too dumb.

Ha

[Marquette]

I predict $300/barrel oil by the end of 2009. Better load up, Ziggy!

[Leonidas]

Wednesday's UK Times:

Quote:

Opec's more aggressive members are already speaking of production cuts. Venezuela and Iran have said that $100 per barrel is a benchmark they will defend and an Iranian official said yesterday that as a first step the cartel's members must stop exceeding production quotas, which would imply an immediate cut of about half a million barrels per day. Oil analysts doubted that Opec would agree to an output cut at its conference in Vienna on September 9, but unease over the price fall is being seen even in Saudi Arabia, the most moderate Opec member. Saudi Aramco has been cutting the discount at which it sells Arab heavy, a poor-quality crude which it uses to calm the oil price, off- ering large quantities at big discounts. Leo Drollas, of the Centre for Global Energy Studies, said: “[The Saudis] . . . fear heavy oil price falls. They are trying to anticipate that by not putting much oil on the market.”

[Notmuchlonger]

I bet Attila and Alexander wouldn't put up with production cuts.

[Leonidas]

Pickens just gave an interview on Bloomberg, here's the highlights:

• Dropping oil prices won't affect public opinion on need for a new national energy plan.
• He is long oil.
• OPEC will not let the price go below $100
• The upside on price could be anything in the long run, but the upside is somewhat limited in the short term because
  • there has been significant demand destruction
  • Economic slowdown in Europe and other places
  • Oil will be at $150 one year from today.
• NatGas price weak and that could cause drillers to back off on exploration and development.
  • NG could drop to the $6ish range in the near term
• Production Tax Credit will be extended by Congress
• He's been talking to a lot of members of Congress, and he believes
  • They will provide for transmission corridors to move electricity into the grids from the windmills he wants to see on the Great Plains.
  • Congress understands the need for a new national energy program and that public opinion supports it.

[cute fuzzy bunny]

Here's what I think...

- Dropping oil prices will make everyone forget about any sort of energy plan
- OPEC has no control over the price of oil
- Oil will be at $150 next year when we get the next round of tempering. Hell, it'll be $175 by mid summer
- Nothing will be done by anyone regarding electric grid extensions for wind power in at least the next 5 years
- Congress doesnt give a hoot about energy programs except to the extent they're driven by the public and the minute its off their radar, its off congress's radar. In the meanwhile, they're dang happy to keep taking money from the lobbyists that'd like to take a few more sips from the oil barrel before moving on to something else.

Lets revisit in 6-9 months and again in a couple of years. See how it goes.

BTW, saw a guy over at the side of the highway on the way back from the farm. Guy was pouring more gas into his empty Hummer from a 5 gallon can with what looked like his wifes car sitting behind his.

[chinaco]

China and India will continue to increase demand. Prices will likely continue to rise.

But, I think the oil consumption (demand) will be driven down or at least growth will be offset by more efficient vehicles and redirecting certain substitutes (like NG). Plus other substitutes. But this process will take years.

We just bought a new car. It gets about 25. City driving was rated at 18 mpgwhen it was new (it is not performing at peak anymore). That vehicle is about 28% more efficient (of course it is smaller in size and engine). That is beginning to happen now.

I believe over the next 4 to 5 years more hybrids will be produced which will further reduce consumption.

There is the other side of the problem also. Two wars in 15 years over oil. Americans are beginning to understand the vulnerability of being too dependent on unstable nations around the world for energy.

[Leonidas]

OPEC says no production cuts. From the chart I can see that the announcement must have come out at about 1415 EDT. Wow, there went a quick couple of bucks off the price in about 15 minutes.

The black gold is hovering just over $100 and NatGas has a 7 handle. I wonder how the hedge fund guys are doing today.

[cute fuzzy bunny]

Yep, both gold and oil are taking major shots. More to come.

[haha]

Quote:

Originally Posted by cute fuzzy bunny Yep, both gold and oil are taking major shots. More to come.

Here is what intersts me most of all-supposedly the oil price was dragging down the economy and falling oil prices would stop that.

I guess not, since most everything hit the skids today and bigtime!

ha

[cute fuzzy bunny]

It'll take about 5-7 weeks for the New! Lower! price to trickle down to having an effect on the economy.

Just...watch out for that trickle...dont git any on ya.

[Donzo]

Now they are talking about $80-90 barrels in the future.....I am so glad I did'nt jump more into energy a few months ago - I have been "sitting on my hands" alot lately. I have my approximate allocation in place and need to just enjoy life -
"stop looking at the market" (delivered like William Shatner in star trek )

[soupcxan]

Oil below $96 this morning, in spite of a weaker dollar. Yikes.

[REWahoo]

In the immediate aftermath of a major hurricane in the gulf it's interesting to observe oil continues to drop in price. Down $5 over the weekend to $96.

Guess we've moved on to the next crisis...

[FinanceDude]

Quote:

Originally Posted by REWahoo In the immediate aftermath of a major hurricane in the gulf it's interesting to observe oil continues to drop in price. Down $5 over the weekend to $96. Guess we've moved on to the next crisis...

Except gasoline in my area went up 20-30 cents literally overnight last night.........

[CitricAcid]

Gasoline may move separately from oil for a while during hurricane Ike, but a little longer the gasoline prices should fall, as long as ziggy's prediction is out there.

[Gardnr]

Quote:

Originally Posted by CitricAcid Gasoline may move separately from oil for a while during hurricane Ike, but a little longer the gasoline prices should fall, as long as ziggy's prediction is out there.

Yep. Many refineries shut down for a while putting a bit of a crimp on the gasoline supply.