Crude over $60 will not last long

[silk]

Scanning over this makes me think these prices will not last. Days, weeks and maybe months but not likely years.

http://www.wtrg.com/prices.htm

The key point.

"Over the same post war period the median for the domestic and the adjusted world price of crude oil was $17.18 in 2004 prices. That means that only fifty percent of the time from 1947 to 2004 have oil prices exceeded $17.18 per barrel. "

So we are nearly at 4 times the median price over the last 60 years even when adjusted for inflation.

I'm not sure I buy into the hype about lack of supply either. This report shows that there are 1.2 trillion barrells of oil down in venezuela. And another few trillion of unconventional reserves else where.

http://www.radford.edu/~wkovarik/oil/3unconventional.html

 

[toc]

How about crude at $80/barrel and then we will talk.

I predicted crude at $39-41 few weeks ago, but it proved pretty slippery to take a prediction walk on it. But lets focus on $80 with added positivity.

 

[silk]

I will reconsider the first time I go to my gas station and there is no gas available.

But until then it appears to me that oil prices over $60 will be a short term aberration. As long as the cost of production is what it is and there is enough supply to meet demand i would not want to bet on prices staying this high.

 

[Babak]

hey silk, good to see you

I'm agnostic, just along for the ride (long oil/gas royalty trusts)

 

[dddooo]

Two oilmen in the White House and the price of oil shoots up to 4 times its historical median value. What a coincidence.

 

[cornholetrading]

I wonder how much of the price is related to the large speculative element to the market at the moment. It is a market in the middle of a large trend move that brings in players who are just a long for the ride, just like the equity market a few years ago. Of course we know there was a detachment from the fundamentals in equities, but the market kept going. I wonder how much of the current price of oil is related to that at the moment. Although from a trading perspective the path of least resistance is still up regardless of fundamentals.

 

[Lights]

hmm, i guess china's gigantic growth is also false and part of the conspiracy.

Quote from dddooo:

Two oilmen in the White House and the price of oil shoots up to 4 times its historical median value. What a coincidence.

 

[dividend]

Quote from Lights:

hmm, i guess china's gigantic growth is also false and part of the conspiracy.

anyone remember what happened to taiwan?

 

[nkhoi]

Quote from dddooo:

Two oilmen in the White House and the price of oil shoots up to 4 times its historical median value. What a coincidence.

my post alluded to this facts and some other "coincidence" was deleted right on spot, so don't tray too far. :eek:

 

[dddooo]

Quote from Lights:

hmm, i guess china's gigantic growth is also false and part of the conspiracy.

Sure, China's gigantic growth started at exactly the moment two oilmen showed up at the White House. That must be another coincidence. China had not grown before that, like in the 90s for example, right?

China's Average Economic Growth in 90s Ranked 1st in World

The WB figures show that China registered an average economic growth rate of 11.2 percent in the first nine years of the1990s, the highest in the world, followed by Vietnam at 8 percent and Chile at 7.8 percent.
http://english1.people.com.cn/english/200003/01/eng20000301X115.html

China's growth in the 90s was just as impressive as it is now, yet it did not affect oil prices then. Weird, huh?