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Gold/Mining/Energy : Big Dog's Boom Boom Room
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To: Andeveron who wrote (105293)7/18/2008 9:10:37 AM
From: ChanceIs  Read Replies (1) of 206148
 
>>>Oil's going way below $100/bbl. ... to $15 by 2011. <<<

Ah well. I may as well pile on.

I have lost track, but I believe that the historic average price for crude throughout the '90 was $25. It took absolutely phenomenal circumstances to drive it to $10 in 1998.

I have a briefing on my hard drive presented by Adam Siemenski - chief energy economist at Deutsch Bank. He presented a statistical correlation between oil market price (x) and finding and development costs (y) and deduced a linear relation as:

y = 2.62 X + 7.53 (in US dollars/bbl)

Bottom line for this discussion is that he projects F&D costs in 2010 as $25/bbl. Then you throw in market supply and demand forces.

Consider inflation. Germany reported 6.2% YTD this AM. The US government has been telling us that inflation has been running at about 2% for the decade. I would guess about 5%. So w/o compounding and based upon the historic average from the '90s we get to $37 minimum.

In fact, demand/consumption is way up globally, and supply at best is flat and probably declining. I have trouble seeing crude below $100 again. Certainly not $80.

Half of the world has woken up to the fact that Hubbert's Peak is real even if its date has not been decided. Oil is increasingly viewed as an investment or minimally as a hedge against inflation. (I would not include the US Congress is the half that has risen from slumber.)

I welcome opposing opinions on this board. You certainly got fried - which is unusual for this very and unusually civil forum. Having said that, you walked into a buzz saw with your eyes wide open.
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