Oil Going To $200 On Obama's Watch

The saga of North American oil is well underway. The current financial crisis, triggered in part by the global oil crisis, is only serving to mask the decline of oil supply in this region. That the supply of oil would move in reverse to the advance in price over a 6 year period

Accordingly, I am calling for substantial new price highs in oil no later than the Presidential Election of November 2012. I expect oil to go above 200.00 dollars per barrel, and to consolidate thereafter between the old price high of 150.00 and 200.00. The seeds for this price spike have been sewn all decade, and are furiously at work right now. We are currently at risk of reaching the old price high of 147 by as early as Spring of 2010. If monetary conditions interfere, this could be sooner. If a global depression develops, obviously, this could be later. A simple progression would take oil towards 75 later this year, then 150 in late 2010, 200 in late 2011, and then the spike above 200 in early 2012.

Moreover, if you look again at the supply data I’ve provided, you will have concluded correctly that I am also calling for North American production to fall below 10 Mb/day this year, 2009. North American supply was down 9% over the past 5 years. If North American supply fell 9% over a five year period as oil rose from 30 to 150, what will happen to North American supply if current low prices persist? If North American supply falls towards 9 Mb/day in late 2011, with attendant reductions in exports from Mexico, I certainly hope the leaders of Ottawa, Washington, and Mexico City have made preparations. And therein lies a big part of this problem. Buildout of public transport in North America is poor. There is little understanding of energy issues among G20, G7, or North American leaders. And, we are a continent of great distances to boot. It