Oil-price bubble won’t burst this time

Diane Francis – Financial Post
I had the privilege of interviewing Houston oil expert, Henry Groppe at the Toronto offices of Middlefield Group, a Toronto investment advisor that has bundled $3-billion worth of income trusts into closed-end funds listed on the TSX.

Today, the overall consensus among governments and oil companies is for prices to remain in the US$50 a barrel range. Last week, Goldman Sachs said they may hit US$105 a barrel.

Mr. Groppe says those estimates are wrong. “I don’t make specific price forecasts but the only way is up,” he said. “We are producing 80 million barrels a day now and this is declining by 5% or four million barrels daily. This means the equivalent of one Saudi Arabia must be found every two years and that’s not going to happen.”