Crude today is dirt cheap: Matthew Simmons

There are projections that oil may touch $200 a barrel by year-end. Do you think we are heading towards such a situation?

There are so many whacky theories swirling around the world on why oil prices stunned everyone. Speculators are mostly betting that crude will soon crash, so I suspect this group of investors is net short, and if they are banned from speculating, oil prices will jump higher.

The oddest question is the one seldom asked: why did 99% of the presumptive oil experts have their eyes shut as this earth-shattering event played out, and why the busload of sleepers are still so confused?


What are the major drivers for the sustained spurt in oil prices?

The prime culprits end up being the consumers in odd places like the US, Russia, the raging demand growth in west Asia and, finally, the two poster children of demand growth: India and China. The other culprits are the 100-odd giant and supergiant oilfields that are far too old, most of which are in permanent decline. Bombay High and China