Saturday, May 07, 2005

The Good, The Bad and the Ugly

Oil is going to $100 a barrel . Yeah right. It was only a few years ago, 1998 if I recall correctly where oil was hovering just above $10 a barrel. So what happened ? Did world demand increase 5 times in the last 7 years to cause oil to crack $50 a barrel ? NO. The demand for oil has increased by less than 25% yet prices have are up 300-400%. Its ridiculous and sooner or later prices will be back at an equilibrium of $30 a barrel. SHORT OIL . Sell Sell Sell. $100 a Barrel !!! Those crazy analysts at Goldman Sachs. What were they smoking ? Before this decade is over oil will fall to $30 a barrel or less. One only needs to look at the historical prices of oil and see the large increases followed by larger drops in price. Current production is more than enough to meet demand . There are enough proven reserves to last us most of this century. New sources are being discovered - Alberta , Siberia . The big oil producers have enough spare capacity to jack up production 25-30% if needed. So why the price increase ? Fear , panic , greed ..the same old culprits . Instability in the Middle East, Terrorism , China is going to drain all the worlds oil. NEVER . Like I said $30 a barrel or below .

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