Veteran Energy Economist: Oil Headed for $20-25
Veteran energy economist Philip Verleger insists oil never should have gone much above $70 a barrel; that it did so only because of "a perfect storm" of U.S. policy mistakes, European economic developments and currency shifts; and that it could well end up back in the low $20s before the global economy gets back on its feet.
"I think it will go a good deal lower, particularly next spring [when oil markets are traditionally weakest]," Mr. Verleger said. "If this thing follows a natural cycle, I think we'll see something as low as $20 to $25."
~From yesterday's Globe and Mail, Canada's largest circulation national newspaper
MP: The last time oil was $25 per barrel (2003), gas was selling at about $1.50 per gallon. The last time oil was $20 (2001), gas was close to $1 (EIA data here).
9 Comments:
He leaves out market expectations in his analysis of what turned out to be a bubble. Oil was being priced not on current supply/demand factors, but on fears of what they would be in several years (mostly based on the usual "current trends will continue forever" fallacy, but some rational). Thing is, oil pumped today gets burned today - no five or 20 years from now, so those fears/expectations of what will happen then only go so far in affecting current prices.
And the coal industry is heading to zero:
http://www.youtube.com/watch?v=Hdi4onAQBWQ
“Oil was being priced not on current supply/demand factors, but on fears of what they would be in several years (mostly based on the usual "current trends will continue forever" fallacy, but some rational).”
As I stated in this commentary, the data (found in this post) beg to differ.
It was not a bubble. It was a market reaction to an imbalance between supply and demand. It is a quantitative fact that ANWR alone could have prevented this imbalance. ANWR alone is estimated to increase our proven reserves by 48%. But, just imagine the possibilities if we were to develop the rest of our tremendous domestic hydrocarbon resources.
Just one problem - Obstructionist Democrats likely to take total control of the Federal government.
Anonymous,
That YouTube clip is a great one.
I built a post around it.
Thank you!
Energy economist Philip Verleger Jr stated: "The reason oil prices shot so high, in a nutshell, has to do with a boneheaded U.S. decision in August, 2007, to put much more light sweet crude in the Strategic Petroleum Reserve."
Does anyone else believe that statement is "boneheaded?"
Those domestic hydrocarbon resources are killing the planet.
This comment has been removed by the author.
CE,
You are clearly well indoctrinated.
What you need to become is well educated.
CO2 is NOT a threat! CO2 is the sole source of ALL the carbon found in ALL carbon based life forms on this planet!
530 Million years ago, when CO2 was about 22 times higher than today, coincided with the single largest explosion in biodiversity this planet has EVER seen! That explosion is known as The Cambrian Explosion:
http://www.ucmp.berkeley.edu/cambrian/camb.html
http://www.palaeos.com/Paleozoic/Cambrian/Cambrian.htm
http://www.google.com/search?hl=en&q=cambrian+explosion
In the United States, the REAL pollutants produced by burning coal are dropping like a rock!
If you want to do something REAL to improve the environment you will drop your counterproductive, dogmatic extremist political agenda and advocate for sharing our clean coal technologies with China (who will continue burning coal no matter HOW loudly you and your uneducated pals scream).
Hmmm. He thought oil was going to $15/bbl back in 2006.
http://seattletimes.nwsource.com/html/businesstechnology/2003257679_oilconsumers14.html
Post a Comment
<< Home