Michael J. Economides – Oil at $120: Here’s Why

It would be more amusing had I not been personally involved. Three years ago I was a lone voice outrageously predicting $100 oil, debated on many occasions on national TV by those predicting $50 or even less. The tapes are still available.

Now, $100 seems conservative, others have jumped on that number by the carload and the OPEC president said last week that oil may climb to $200. This, by the way, is the same organization that four years ago was insisting that the


Oil is at $120 with no price reduction in sight because of two simple but unsavory facts: We in the United States and Europe have earned the right and the luxury to be ridiculous and oil producing countries, knowing this, have become militants, in what arguably can be called energy imperialism.

First a disclaimer, in itself silly that I have to make. This article is not paid by Big Oil. Second, I have a simple belief: energy and its abundance is perhaps the most important commodity in modern life, bar none, and any energy shortages will plunge the world in an economic tailspin we have never experienced before. If one does not believe this, no need to read further.

Of the world energy demand 87 percent comes from fossil fuels, oil, gas and coal. This fraction has not changed much since the 1970