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Is oil going to $60 a barrel? $70? $80?
Friday, May 08, 2009
The bad thing about any economic recovery that comes either this year or next is that it is sure to be accompanied by some nasty surprises in the commodity markets.
Since shortly after the $147 peak for crude oil last July, about the only thing that's been done regarding our long-term energy problems is to stop drilling. If the economic recovery is anywhere as big as stock markets seem to think it will be, we'll go through the stockpiles in Cushing, Oklahoma like a hot knife through butter and it'll be early-2008 all over again.
3 comments:
The stock market is funny. The hyper pessimism in February and hyper optimism right now drive me crazy. Oil at $45-60 is what we will see for a long time.
The reality is that business is still slowing down rapidly, no matter what many public companies CEOs say. I can tell that Q2 is going to bu a surprise for many.
I think it'll hit $80 or $90 in the next few weeks or so. This thing has got so much momentum now, it's going to be a repeat of last summer but at much lower levels. Like 2006 maybe.
Huge inventories of homes, an impending commercial real estate collapse, auto sales at 60% of previous, unemployment 8.9% and rising, that will lead to massive credit card defaults, rising interest rates due to monetary inflation, a fascistic government that hates business, I'm not seeing why there will be any sort of "recovery" in the next year or even two.
That is, in the US. Worldwide, things will recover as they decouple from our economy and they will use the oil and other resources we don't. .
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