Goldman Sachs said $175 crude “represents the price level required to maintain trend economic growth against our anemic supply growth forecasts, assuming growth in the US re-accelerates early next year”.
An industry expert last month claimed oil prices could top $300 per barrel within the next five years, describing current highs of $100 a barrel as “cheap”.
“Oil for June delivery settled at $118.75 a barrel Monday on the New York Mercantile Exchange after earlier touching a record $119.93. Longer-term oil futures, dated for 2013, now trade at $108 a barrel, a strong indication that investors see little cause for prices to drop in the next five years – partly because of low expectations about production growth.
The outlook for oil supplies “signals a period of unprecedented scarcity,” an analyst at CIBC World Markets, Jeff Rubin, said last week.”
The CEO of France’s Total SA predicted Wednesday that oil prices will stay high for a long time and said consumers should get used to it. […] “The price of hydrocarbons will stay high for a long time,” he said, adding, “There will not be any more oil at the end of this century” than there is now.
“Tighter credit does two things. It slows down global economic growth and, by definition, it also slows down energy demand,” said Fadel Gheit, senior energy analyst for Oppenheimer & Co.
The nation’s economic prospects were much stronger a year ago, he said, when oil was trading at $75 a barrel and gasoline sold for an average of $2.77 a gallon nationally and $2.99 a gallon in California.
Oil could drop as low as $60 a barrel by the end of the year, Gheit said.
Now excuse me while I go take a nap until the doomsday-depression crowd is finished with their 15 minutes.
Update: Related.
Hindsight is 20/20 Kate
Have a look around and I’m sure you can find some quotes from people who predicted correctly.
Alrhough It is starting to appear that all the countermainstream reporting (boasting) this site has been doing for years is going to end up smearing egg all over Kates face. That is, depending on who you ask.
Btw- Who runs that CBC?, I need to write a letter or ten, this propaganda machine has run far enough on my nickel.
sl
And do these experts get big pay checks ?
Are they penalized when they are wrong ?
Will the MSM keep quoting them in the future ?
Will all the citizens keep imbibing the junk forever ? NO !
Many, many young people believe very little of what they see on the news channel. Can you say attrition ?
“Hindsight is 20/20 Kate
Have a look around and I’m sure you can find some quotes from people who predicted correctly.”
Your absolutely right. But how do you explain that monkeys throwing darts have the same record as all the experts … in our 20/20 hindsight?
I’m sure Warren Buffet saw a house of cards, and just bided his time.
In a related issuee, I wasn’t happy with two quarters of losses in my rrsp (Scotia- two so-called, professionally managed funds). So I moved them in May. Not big money mind you, but I wonder how they would have done lately. Chuckle….
“There will not be any more oil at the end of this century” than there is now.
What, is that supposed to mean? It took an expert to say that at the end of the century, we will have as much oil as we have now?
The only commodity that is still plentiful and not taxed… so far, is opinion. Everyone seems to have one. It has spawned a whole new industry in the MSM. Seldom we see a news item without an expert or color commentator giving their “expert” opinion. Unfortunately, the media (and everyone else with an agenda) canbe selective in finding the “right” opinion that fits with the spin that is intended.
Jeff Rubin was also the guy who predicted (back in about 2002?) that the Canadian dollar would go below 0.50 U.S.
For what its worth here are my predictions.
1) By the year 2020 the Saudis and Chinese will own the USA lock stock and barrel.
2) Homer Simpson will wear a thobe and Marje will be wearing a tall blue hijab.
3) Rice will replace the potatoe as the number 1 carbohydrate served with meals.
On a Mcjob or welfare, 60$ oil is as expensive as 150$ oil when you use to have a real job.
Sent this letter on this subject to Don Martin of the National Post earlier this morning.
“I apologize if I am wrong but aren’t you a journalist for the National Post and not a financial analyst. How the hell do you know if Harper’s platform is not enough to see us through this tough economic time that in case you haven’t noticed is an American created disaster. Do you want Bob Rae back to see us through this turmoil? Do you remember that it was Mike Harris, a Conservative using the platform developed by Stephen Harper, that brought Ontario quickly back to a booming economy? You journalists, with the vast majority being leftists, are supposed to report the news not attempt to make it. Before you wrote the article did you collaborate with your financial advisors in Hollywood like Sean Penn?
Every leftist facet of our society, unions, MSM, teachers, socialists of all stripes are not just attacking but hate the Conservative agenda, which has brought in good legislation in a hostile parliament for 2 1/2 years and it makes you wonder why they are so spiteful and vicious. I firmly believe it is because the CPC stands in the way of the socialist march in Canada. All three other political leaders are ardent Marxist-Leninists and they want to lead us down the road of shared misery. Be careful what you and the rest of the media wish for, you may get it.”
Keep something in mind, there has been no discovery of a huge new easily accessible light crude oil field in decades. The BRIC countries are picking up the slack even if there is demand destruction in the US. The supply part of the equation is in favor of oil prices remaining high.
Oil, natural gas and the oil sands are wealth in the ground especially as our paper money turns to ashes. The sell-off in those stocks reflects hedge funds deleveraging, selling the good with the bad, as much as anything.
I wouldn’t bet on oil ever retreating for long below $60/barrel.
Dead on Dave, these jerkoffs have no idea what is in store for them if Lenins little grandson Layton ever got power, ask the kids at Ryerson who were brave enough to laugh at him. And as far as Dion, we can only turn to God if this idiot ever won. Carbon tax in tough economic times, real thinker this nutty professor is.
If obscene taxation and bloated social programs are the “cure” for this (as Dion, Layton, and May claim), then why is it that the UK just partially nationalized their banks this morning?
good call right honorable terry…
here is a little chart I worked up when oil was “only” 70 bucks a barrel
min wage oil barrel
1 buck 1956 2.36 hours
1.60 1968 1.8 hours
5.85 2007 12 hours
I saw Harper on the National last night, and he did quite well, IMHO. Much better than during the Leaders’ Debates when the scene reminded me of a prison gang rape on the show OZ.
Mansbridge tried to sucker him into admitting that he’d put Canada into a deficit in order to overcome an economic decline, but he wisely didn’t take the bait.
He might have pointed out that Bob Rae tried to deficit-spend his way out of a recession in Ontario, and all he got for his efforts was a huge debt load that Ontario still struggles with today, and a recession that just wouldn’t go away until he left office.
The fact that the decline in Harper’s fortunes seems to go lock step with a decline in the stock market indicates that the entitlement psychology has spread far beyond starving artists and cranky university students: apparently middle class Canadians now feel “entitled” to a rising stock portfolio and soaring real estate values, and feel that it is the job of the state to guarantee those things.
penny, there’s plenty of undiscovered oil, they’re just not allowed to drill for it any more. Look at the oil discoveries that have suddenly turned Newfoundland into a major oil producer. There’s billions of oil to be had on our coastlines. Everywhere an oceanic plate is being subducted, there should be oil. Everywhere a major river dumps into the ocean, there should be plenty of oil.
Jeff Rubin is an idiot. Sort of the Canadian version of Krugman. He is all about getting attention and less about economics.
Good one Kate.
Brent Sea oil is flirting with low $80s, and Texas flirting in the high $80s this AM.
If oil goes below $80, watch out for falling/stalling oilsands projects in Ab.
When the economic genius Hugo Chavez was cheerleading for $200/bbl oil a few months ago, I pointed out that he clearly didn’t understand what that would do to the world economy and his own economy.
In diverting mountainous sums of money into paying for oil and gas, the money had to come out of other parts of the family, company and national budgets.
Ergo, cutbacks in buying comsumer goods etc.
Price rationing is such a useful capitalist tool, and oil only had to go to $147/bbl for it to kick in.
Can you say world economic slowdown?
According to Steve Janke, Dion is once again pushing his Green Shift plan. Not surprisingly, Bob Rae is simultaneously downplaying it. I suspect that, buoyed by a rise in the polls, Dion is now reasserting control over his campaign, which can only sink it.
The focus on our carbon footprints has distracted the world from real problems. That lack of focus is comming home to roost now.
With the consensus on AGW it was going to take something really big to persuade the true believers that AGW was not a problem. Things were not looking good even with the world cooling until the US unleashed their subprime weapon on the world.
A lot of the cash that was feeding the war on CO2 has been vapourized. When reality bites it bites hard.
When Canadians look around the world they see many countries banking systems in trouble can they say the same thing for Canadian banks? It turns out that our financial institutions are in such good shape that they will be inhaling some U.S. banks. Looks like the Harper government has been doing a better job than European and U.S.overnments.
Well said Dave @ 9:21 am –
Canadian MSM journalists like Don Martin have grown up in relative safety benefiting from the sacrifice of an earlier generation who died protecting the very freedom the MSM Don Martins of this world are ready to forfeit to the communists like Duceppe, Dion and appeaser Taliban Jack Layton.
95% of current MSM are socialist / Liberal/ /Green ‘LICKSPITTLE’ in the system.
Liberal Ron said; ” (in the USA) Rice will replace the potatoe as the number 1 carbohydrate served with meals.
Oh Comon, obviously, you have never been down to the Southern States in America. Rice is second nature heya. Why, what else would we put in our Boudain ? What would we put our Beans, Chili, Gumbo, Aye-two-fey, Beef Tip Stew, Jambalaya and Catfish MeatLoaf on ? Not to mention, I make a hell of a Broccoli Casserole.
Why just last weekend I whopped up some Fried Veal Pork Chops and Brown Mushroom Gravy served over Poached-Bleached Cajun White Rice with Alabama purple-hull peas and farm-raised fatback and boiled down some Ouchita Parish greens and turnips with smoked pig-knuckles and then too top it off, my cousin, God Bless Her, she is a lil on the heavy-side, made her Blue Ribbon hot-water cornbread.
Shoooo Doggies, now that there eating would rival any fancy restaurant up north.
I have no idea why the banks and brokers employ analysts or economist. At best (which is charitable,) they are bad historians.
At worst, they are less adept at picking stocks and projecting future events than random monkeys throwing darts.
The banks could raise their dividends with the money they pay these people and it would provide more value added in a moment than these losers would add in a century.
It is geniuses like this who sucked up the packaged subprime mortgages lock, stock and barrel. Judging by the bank failures around the world, the U. S. doesn’t have that market cornered. Check the foreclosure maps. The deep reds are clustered along both coasts and the Southwest. Banks in the flyover states are steaming along – they didn’t dive into subprimes, plus the culture in this region is conservative. People here live within their means AND pay their bills. Shopping the last couple of weeks, the malls are mobbed – even the high-end stores. WalMart yesterday was a zoo [but isn’t it always?]. We’re adding an addition to our home. Checking back with the bank, no problemo. This is a Washington/coastal elitist [socialists all] problem.
Great comment Dave; you nailed it with the entitlement to rising markets comment. The 80 “leading economists” who want Harper do “do something”, while never telling us what, are left wing lunatics like Arthur Donner and Mike McCracken – they ones who are wrong most of the time but right some of the time, people I told my investment clients to ignore unless you wanted to lock losses in.
Stephen Harper is right, there are many good buying opportunities right now. I saw the Mansbridge interview, and went Harper made the “stocks on sale” comment, it would have been better if he had linked the opposition to those who panic and sell in this downturn.
A propertly constructed portfolio (government) gets people through crises, where they don’t have to panic. You only lose when you sell, and if you are drawing an income, you should be much less exposed to equities, and only hold the highest quality, which will be the first investments to come back.
Jack Layton, with his idiotic comment about people hurting shows his true ignorance. Of course, being a Marxist, he sees stock markets as evil, and ignores the companies in them are part of the reason for our prosperity.
Layton thinks we can “make polluters pay” without telling us we will be the ones who pay. We are the polluters (who drives the cars?), and taxes and regulations will push us into an inflationary spiral at a time when those pressures will only increase, given the productivity decrease brought on by demographics (think boomers retiring and being replaced by less experienced younger workers).
Somebody needs to give Layton and Dion a copy of “Boom, Bust and Echo.” These men is dangerously out of touch.
Remember, Layton propped up the corrupt Liberal regime to get some of his higher tax policies through. Think what will happen if he actually has enough seats to support a Liberal minority with a weak leader like Dion.
It happened federally in the 1970s, and in Ont in the 1980s. In both cases it presaged a period of high interest rates, inflation, unemployment and debt that, in both cases cited above, that is still on the books.
If we continue to be beholden to Central Canadian “progressive” political culture, then I fear for this country I love. We have a PM with a Western Canadian riding who has been called Hitler and a Bush lover, who was not allowed to complete a thought in the debate without being interrupted by “progressives” who apparently think they have a right to shut down and insult anyone who doesn’t see it their way.
Like I said, I love Canada, but should the nightmare scenario unfold, I, and many others who live in the West and are constantly told to shut up and send more taxes to Ottawa by the chattering classes, we will have to make our minds up what we are going to do.
Love them or leave them. A socialist government will lock in losses everywhere by distorting economic performance to appeal to their short-sighted and immature constituency.
This Westerner, is sick to death of them holding sway over my life. I refuse to be part of it, cowtowed into only expressing politically correct “values” while bigots call me a redneck and knuckledragger.
Meanwhile, pending house sales showed a surprise leap, when all the “experts” called for a drop.
http://money.cnn.com/2008/10/08/real_estate/home_sales.ap/
I’m no expert, but I’ll make a prediction: lower oil prices, lower housing prices, and all the deadbeats who defaulted on their mortgages and now have extra cash will combine to bounce the US economy back much faster than any expert is predicting. Oh, and all the executives in the big banks will continue to be overpaid.
pete, we have to stay with what is know for now. That’s what is priced into oil. Not all oil is equal in terms of quality and cost effectiveness in recovering it.
I agree with you that it is stupid to not be surveying and drilling everywhere we can. The lunatic Dems no matter what they say to get elected will turn on a dime and revert to green Luddites. The fools would prefer to throw money into alternatives which except for nuclear will always be marginal and expensive. I doubt they’d have the brains to get our nuclear industry back on tract either.
–penny
I know that facts don’t matter over a good rhetorical jab, but seriosly
There are other discoveries, Gulf of Mexico, there is a lot of oil in ANWR.
truthsayer; “The focus on our carbon footprints has distracted the world from real problems. That lack of focus is comming home to roost now.”
EXACTLY !! Was it intentional ?
[Strong (Maurice), naturally, is on the board of the World Economic Forum. “What if a small group of these world leaders were to conclude the principal risk to the earth comes from the actions of the rich countries?…
In order to save the planet, the group decides: Isn’t the only hope for the planet that the industrialized civilizations collapse? Isn’t it our responsibility to bring this about?”]Calgary Sun
New discoveries !!??
Falklands Oil Sask Oil Quebec Gas Asian Gas Sask Oil Sands BC Bonanza Bakken Alaska Brazil NewIraq …..
Whoa Ratt that sounds like heaven. You should put out a cookbook.
Now thats eaten.
The S&P is trading at 10x forward looking earnings for the first time in 30 years I am wondering if that is now a useless stat, where in the past its been bedrock.
Market axiom: never try to catch a falling knife.
When CIBC’s Rubin and others predicted oil would top $200, I bet against them (I’ve never been impressed with Rubin’s track record, and usually go opposite to what he suggests). Now I’m waiting for the market to bottom out (I think it’s going to go lower yet) before I get back into investing when stock prices are finally reasonable.
The only reason to hide under the desk is to protect yourself from politicians and MSM idiots who don’t know anything about economics, but want to “help” us out.
You can call me cruel, but if you are living beyond your means you get no sympathy from me.
CRC
Well reasoned and true, Ron in kelowna and truthsayer. Old unca’ Mo has the Canadian media to help him.
I saw an e-mail on CNN today concerning the economic meltdown: “The people of America should be mad as hell at themselves for voting in these politicians. Same goes for Canada. We have the best Prime Minister and team Canada has ever had – if PMSH were to lose this election, the country will fracture (East-West, not Quebec-ROC) and the eastern people will find themselves very poor and very controlled. It is a historic election all right and it is the voters decision. Please think before you vote taxpaying citizens.
I was saying a long time ago that the price of oil would put the brakes on the economy. Here we are in full skid. Big oil in Canada -Petro Canada, Esso, Shell has kept the price at the pumps high even with the recent drops to Crude. My Government stands by and does nothing. So here we are today, 120 per L and oil at 89 dollars per barrel. Thank you BIG OIL for at least using KY as i’m a little raw these days.
I’m surprised that the parties representing environmentlists (the Greens and the NDP) are so upset about the impending doom of a depression. The decreased consumption of energy and will result in a decrease in the carbon dioxide going into the atmosphere.