Jim Rogers: Oil will hit $100

Quote from hypostomus:

My opinion doesn't count for much, as I clearly am part of your "public". However, my belief is that oil will continue to rise in real value (and priced in dollars) for about three years until alternate supplies come on line in significant quantities. The price of oil-and gas-derived fuels is outrageous relative to electricity and I believe we will see ever-increasing electrical use. In Texas, TXU plans to bring on-line more coal- and nuclear-powered plants, in a farsighted investment posture which I believe is unmatched anywhere else in America. Eventually a lot of us are going to be charging up rather than gassing up, and more of us will be heating with electricity. When that happens the price of oil will drop. But mostly my objection to your prediction stems from a profoundly dyspetic view of the dollar. I continue to buy and store REAL money.
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thank you for the explanation.

surf:)
 
peak oil is bad science? ha... at least with a statement like that, substantiate your argument.


Look at every balance sheet on every oil company, independent small or major, and production is declining year after year.

Believe me, small producers have even more incentive to drill for oil RIGHT NOW heavily as they have no way to overwhelm the market with supply and affect price, but they can't do it (unless you talk about expensive shale and oil sand sources).

If this were solely an OPEC/XOM/etc. conspiracy, small producers would have prime opportunity to exploit that. But they aren't!!!

Mexico production is declining; Indonesia production is declining; Venezeula is declining; Saudi ghawar is thought to be declining; independents production is declining; people are desperate enough to drill offshore in hurricane paths and extract from expensive sources (sands and shale); and consumption is at 85mb/d relatively unaffected by $75 oil.

You are fantasizing.

On the other hand, if nymex were forced to eliminate leverage from futures trading and treat them 1:1 like options, oil would drop a bit, maybe to even $40-50. But that doesn't change the long term (next 10 years, before we can switch to some other source) view: up.
 
Quote from hypostomus:

My opinion doesn't count for much, as I clearly am part of your "public". However, my belief is that oil will continue to rise in real value (and priced in dollars) for about three years until alternate supplies come on line in significant quantities. The price of oil-and gas-derived fuels is outrageous relative to electricity and I believe we will see ever-increasing electrical use. In Texas, TXU plans to bring on-line more coal- and nuclear-powered plants, in a farsighted investment posture which I believe is unmatched anywhere else in America. Eventually a lot of us are going to be charging up rather than gassing up, and more of us will be heating with electricity. When that happens the price of oil will drop. But mostly my objection to your prediction stems from a profoundly dyspetic view of the dollar. I continue to buy and store REAL money.
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I agree - nuclear will win this fight - but it'll take 5-10 years. Nuclear power plants are slow to build. In between now and then, I wouldn't doubt $100-$200 oil and its horrible economic effects.

50% of new cars will be hybrid gas/ethanol within 3 years of $125+ oil, out of necessity.
 
Quote from scriabinop23:

Mexico production is declining; Indonesia production is declining; Venezeula is declining; Saudi ghawar is thought to be declining; independents production is declining; people are desperate enough to drill offshore in hurricane paths and extract from expensive sources (sands and shale); and consumption is at 85mb/d relatively unaffected by $75 oil.
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Here's a chart of production by country: http://www.worldoil.com/INFOCENTER/STATISTICS_DETAIL.asp?Statfile=_worldoilproduction

There are countries, like the ones you mentioned, that are producing less. But to be fair, there are also countries are are producing more. Total world production is increasing.
 
Quote from Aaron:
here are countries, like the ones you mentioned, that are producing less. But to be fair, there are also countries are are producing more. Total world production is increasing. [/B]
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Good link. thanks.
 
Quote from marketsurfer:

wow, what incredible bias toward $100.00 plus oil and animosity for those whose research/studies indicate it aint gonna happen.
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There is no research/studies.


i confidently stand by my earlier projection of < = 70 prior to 80 and that we will not see $100.00 oil, for 50 plus years--perhaps never.
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The USD only has to drop a little bit to see $80 oil. A bit more to see $100.


ps. peak oil theory is bad science. pure and simple.:D
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Put up or shut up.
 
Quote from Aaron:

Here's a chart of production by country: http://www.worldoil.com/INFOCENTER/STATISTICS_DETAIL.asp?Statfile=_worldoilproduction

There are countries, like the ones you mentioned, that are producing less. But to be fair, there are also countries are are producing more. Total world production is increasing.
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This is correct, but the point is that demand growth is CURRENTLY outpacing supply growth and there is no discernable near-term additional supply on the horizon. Rather, supply growth is projected to begin to ACTUALLY DECLINE within the next 25 years. Do you know how bad that is if oil is our only MAJOR global energy source? Aren't traders supposed to be able to deal with a basic level of complexity?
 
longer term price trend of oil reflects demand. short term price spikes may be influenced by supply. demand is a function of consumption. the economy is softening (2.5%gdp vs. 3.0 consensus). Rate hikes take anywhere from 3-18 months to take effect. All these rate hikes will trickle down into economy over next year. Fed may pause in Aug. to assess growth vs. inflation. Current inflation figures are way beyond fed comfort level. After pause, higher inflation #'s will warrant further rate hikes, further dampening economy. Fed will risk recession to fight inflation.

And finally, the US is the #1 consumer of crude oil. Demand of oil is function of economic health.

Quote from BrandNewTrader:

This is correct, but the point is that demand growth is CURRENTLY outpacing supply growth and there is no discernable near-term additional supply on the horizon. Rather, supply growth is projected to begin to ACTUALLY DECLINE within the next 25 years. Do you know how bad that is if oil is our only MAJOR global energy source? Aren't traders supposed to be able to deal with a basic level of complexity?
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Quote from marketsurfer:


ps. peak oil theory is bad science. pure and simple.:D
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Come on Surf, you should know better. The history of oil won't last more than 200 years, counting from Colonel Drake's first oil well in Titusville, PA. (care to visit the place?), in 1859.

Now I am sure, you agree that oil will run out eventually. It is simply just question of TIME.

What most people don't realize though, that this time depends not just on production, but consumption too. Thus if I define "peak oil" as more consumption than production, then peak oil has already happened, last year.

Supposed nothing big worldwide event is going to happen (war, flu, asteroid,etc.) in the next decade and both the growth of production and consumption stay the same, then we are heading toward troubling times, because right now the rate of consuption thanks to India, China and the Hummers is outpacing the rate of production.

So you tell me what happens when the supply is less than the demand???

And if you define peak oil as absolute oil production, that will arrive in 3-5 years...
 
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