[oilluber]

alot of hot air, fancy predictions....
is it backed up by going short the oil futures ??
If it is not backed up, the guys making these predictions
don't even believe their own predictions.

[Heineken]

The cost of extracting oil is rising rapidly and will continue to do so as the "easy oil" disappears forever. Thus, there is probably no way the price could fall to $25, perhaps not even if we had a depression. If we're very, very lucky, we might see $50 again for a short time.

[Denny]

Some tricky wording in this article:

$this->bbcode_second_pass_quote('KevO', ':'): A slowdown has begun in global demand. The increase in demand in China, which was at 900,000 barrels a day in 2004, will recede to 500,000 this year.

[rockdoc123]

One thing I should point out is that current real finding and development costs for most companies in mature basins is nearly $20 and sometimes a bit higher. Much of this is due to the rising cost of labor, steel etc. If oil prices dropped precipitously into the $25 range everyone would go out of business....the oil and gas companies would quit drilling, the drilling companies would not be able to adjust their prices down far enough to attract business simply because they now have overhead that requires higher prices or more volume of business. It would likely take 3-5 years before costs and prices became realigned and by that time the only ones left standing would be the Exxons of the world who have enough cash to replace reserves by picking off the multitude of smaller outfits that go belly up. For this very reason I do not see anything below $40/bbl in the foreseeable future. Currently most companies reject projects that won't make their hurdles at $45....no one in the industry is contemplating $25 except BP who only does it in public and not behind closed doors.
But of course, I've been wrong before, such is the uncertainty in this business.