www.oil-price.net predicts $92.50 by January 2006. What do yo predict?
70
17%
[ 18 ]
80
35%
[ 36 ]
90
10%
[ 11 ]
100
20%
[ 21 ]
110+
15%
[ 16 ]
Total Votes : 102
Author
Message
kmann Heavy Crude
Joined: Jul 25, 2005 Posts: 318
Posted: Mon Aug 22, 2005 1:14 pm Post subject: Re: Barrel price prediction: $92 by January 2006
Falconoffury wrote:
What is your logic behind $40 in January 06? The world demand is already outpacing supply. While the price may fluctuate slightly, it will be on an overall upward curve.
Don't be a victim of wishful thinking.
I can't speak for shady28, but I think prices will come down for a couple of reasons. First, the current price is starting to affect peoples behavior and choices such as miles driven, or type of car they buy. As prices keep going higher, at some point demand has to decrease. It will take a while for this to work its way through to lower prices. Also, there is currently a small worldwide production overcapacity.
$40 seems a bit optimistic, but barring a significant event, $50 is not at all unreasonable.
Posted: Mon Aug 22, 2005 11:09 pm Post subject: Re: Barrel price prediction: $92 by January 2006
Kmann, the problem with that is that gasoline is very inelastic. That means that demand will constantly be pressing against supply. Demand destruction will only take the price down so much, and last I checked, the global economy is still growing. _________________ "If humans don't control their numbers, nature will." -Pimentel
"There is not enough trash to go around for everyone," said Banrel, one of the participants in the cattle massacre.
"George W. Bush loves poor people. He keeps making more of them." -unkn
Posted: Tue Aug 23, 2005 12:47 pm Post subject: Re: Barrel price prediction: $92 by January 2006
Gasoline has been very inelastic recently, but I'm guessing that demand is about to shift down structurally. I base that on what the buzz is in conversations, and what my own changes in behavior have been. It will take a few weeks to a few months for the effects to felt in the market.
Posted: Tue Aug 23, 2005 1:00 pm Post subject: Re: Barrel price prediction: $92 by January 2006
Also, I think there is speculative over buying right now, the uncertainty premium if you will, in the oil market right now. If demand is seen as decreasing instead of increasing as it has been, speculative buying will dry up. Of course, one major event and up it goes.
I should add I'm talking about US consumption. I think the US alone can change the world oil supply/demand balance from deficit to surplus.
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