[timmac]

Price of barrel went down to $122.00 around 5-13/Tuesday,, it look as if oil price might settle down some,, Than Bush crawls on his knees to the Saudis to see if they can help with even lower oil prices,,,,,,,,,,,,,,,,,,,,,,,,, As always Bush screws this up and the Saudi goverment says no more oil output and price shoots to $127.00 a barrel by Friday/5-16,,,, I hope Bush stays out of the oil business problem for the rest of his term...

[Windmills]

It's still less than a year though, folks. How long has it been? Three months or so that oil has been over $100? There's a chance he could still end up being right. You never know.

"About one in a million."

"So, what you're saying is that there's still a chance!"

[SILENTTODD]

RECONSIDERATION: WHY OIL WILL ALWAYS BE LESS THEN $100?
HA, HA, HA, HA, HA, HA, HA, HA, HA, HA, HA, HA, HA, HA, HA, HA, HA, HA, HA, HA, HA, HA, HA, HA, HA, HA, HA, HA, HA, HA, HA, HA, HA, HA, HA, HA, HA, HA, HA, HA, HA, HA, HA, HA, HA, HA, HA, HA, HA, HA, HA, HA, HA, HA, HA, HA, HA, HA, HA, HA, HA, HA, HA, HA, HA, HA, HA, HA, HA, HA, HA, HA, HA, HA, HA, HA, HA, HA, HA, HA, HA, HA, HA, HA, HA, HA, HA, HA, HA, HA, HA, HA, HA, HA, HA, HA, HA, HA, HA, HA, HA, HA, HA, HA, HA, HA, HA, HA, HA, HA, HA, HA, HA, HA, HA, HA, HA, HA, HA, HA, HA, HA, HA, HA, HA, HA, HA, HA, HA, HA, HA, HA, HA, HA, HA, HA, HA, HA, HA, HA, HA, HA, HA, HA, HA, HA, HA, HA, HA, HA, HA, HA, HA, HA, HA, HA, HA, HA, HA, HA, HA, HA, HA, HA, HA, HA, HA, HA, HA, HA, HA, HA, HA, HA, HA, HA, HA, HA, HA, HA, HA, HA, HA, HA, HA, HA, HA, HA, HA, HA, HA, HA, HA, HA, HA, HA, HA, HA, HA, HA, HA, HA, HA, HA, HA, HA, HA, HA, HA, HA, HA, HA, HA, HA, HA, HA, HA, HA, HA, HA, HA, HA, HA, HA, HA, HA, HA, HA, HA, HA, HA, HA, HA, HA, HA, HA, HA, HA, HA, HA, HA, HA, HA, HA, HA, HA, HA, HA, HA, HA, HA, HA, HA, HA, HA, HA, HA, HA, HA, HA, HA, HA, HA, HA, HA, HA, HA, HA, HA, HA, HA, HA.

I HAVEN'T EXPANED SINCE THE FIRST WORDLD WORD'

[yull]

Another optimist bites the dust.

[ROCKMAN]

Hey gang,

I can make a prediction of oil dropping to $40/bbl in 6 years that’s both credible and defensible. You need only remember that every prediction is based upon assumptions. And the validity of those assumptions determines the credibility of the prediction.

Back in the late 70’s when I was just a pup of a geologist companies were using a price forecast of $70 to $90 per bbl by the mid 80’s. Such forecasts are needed to run economic models to evaluate drilling deals.

It didn’t quit shake out that way. The oil price run up caused a worldwide recession that knocked consumption down (vague memory of a 6% to 8% drop) which, in turn, led to $10/bbl oil in 1986. I personally knew of dozens of small companies that went belly up as a direct result of this bad forecast. And also 2 geologist who committed suicide over the short fall. The number was thrown around that the oil industry lost over 500,000 jobs but who knows. But I know I was getting up at 2 in the morning to deliver produce to restaurants for a while.

OK…wipe your tears and pay attention. My forecast is just as credible as anyone elses (and more defensible then many). I don’t know if the world will slip into a recession as it did in the mid 80’s. But if it does then my prediction is a valid extrapolation of what happened a little more then 20 years ago.

[RainShadow]

Hey gang!

$140 today! And only 256 days until March 9, 2009*!

And Rockman, come on. Don't derail the denial thread. This is about "Why Oil Will Always** Be Less Than $100." If you want to post your own prediction in a fresh thread, go ahead. Better be prepared to defend against the incredulous, however .

(*One year from the start of this thread)

(** In this case, "Always" means a one year period, because oil was [amusingly enough] over $100 when the thread was started)

[killJOY]

$this->bbcode_second_pass_quote('', 'T')his thread is stupid.

[ROCKMAN]

Hey Rainman,

I'm right on the thread: 1) IF the world had gone into recession 2 years ago oil would be under $100/bbl right now. 2) and IF the world were to stay in recession indefinately oil would stay way under $100/bbl. 3) and IF frogs had wings...wait...think I'm sliding off thread again

[RainShadow]

Hey COCKMAN, you really want to play games with forum handles? Because that might be fun.

Being able to come up with a scenario under which a commodity might someday fall below a specific price does not mean that it will always be under that price. In fact, it's got nothing to do with the price of the commodity always being below a certain value.

Especially since it hasn't been near that value in months. Our friend kilJOY is getting his kicks on "then." Me, I'm laughing at the "always."

But since we're making predictions...

The passenger pigeon will always be a common North American bird.

The Roman Empire will always rule the Mediterranean sea.

The Titanic will always be unsinkable.

[timmac]

This one's for KillJOY>>>>> THEN, THEN, THEN, THEN..

[EnergyUnlimited]

$this->bbcode_second_pass_quote('', 'W')HY OIL WILL ALWAYS BE LESS THEN $100

[Daniel_Plainview]

$this->bbcode_second_pass_quote('EnergyUnlimited', '')$this->bbcode_second_pass_quote('', 'W')HY OIL WILL ALWAYS BE LESS THEN $100

[timmac]

Could oil dip below $100.00 before this year is up or is this major drop just a short run down and will start to rise again..

[ROCKMAN]

timmac,

I won't bother to guess if it will or won't. But I can tell you the factors that will determine it. Demand destruction is the first factor. When Saudi cranked open their wells and drove oil prices to $10/bbl (a 70% price drop) it was a response to a demand drop of 15%. The oil price spike of the late 70's sent the global economy into a severe recession. Saudi had to drop their asking price in order to recover market share they had lost to other OPEC members.

It takes a good 12 to 18 months for the oil inflation factor to work its way through the economies. Right now we're just starting to see the impact of $70+ oil. Demand destruction will continue. But this isn't 1986 in a number of critical factors. China et al developing economies is a big unknown. Will they absorb the higher oil prices and keep booming? Time will tell. A more critical difference is PO. All of OPEC with the exception of Saudi admits they are at PO. The world wants Saudi to produce more oil so prices will decline. But there is no one to buy that extra oil right now. The world is buying all the want/can afford right now. What is actually being asked of Saudi is that they lower their asking price so they can take market share away from other OPEC countries. But even if Saudi did that it wouldn’t guarantee lower prices for any length of time. The other OPEC members could decide to same their oil reserves since they are declining anyway. They might be satisfied to reduce their income now knowing they sell those same bbls of oil later for perhaps even a higher price.

The short answer: we are watching a race between demand destruction and PO declining production capability. Make your own guess on the outcome. It will be just as valid as anyone else’s IMHO.

[BigTex]

$this->bbcode_second_pass_quote('killJOY', '')$this->bbcode_second_pass_quote('', 'T')his thread is stupid.

[ROCKMAN]

Also timmac, a little point that continues to bother me. The drop you mention was for oil future contracts for some date down the road. The oil I sold last week for $X was till sold for $X. The oil I'll sell when the tanker shows up next week will sell for $Y. The movement in the futures market isn't going to determine how much $Y is. The local oil buying market will make that determination.

There is a link between futures contract and actual oil sales but it's very convoluted.

[hironegro]

Hey bro if it goes down to 80 you might get the last laugh.

[timmac]

WOW oil is back down to $114 a barrel now,, I wonder how low it can go maybe below $100 ??,, maybe its time to go buy that $10,000 off list price new big 4x4 suv and a newer motorhome...