They think China demand after Olympics will force prices back up.
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Among their well-presented and well-researched data, The Oil Drum says, referring to the chart – does it look like prices are crashing? So, at this point, I’m still happy to continue my “Countdown to $200 oil series” and see no reason why the recent lull in prices would be a sign of a serious [...] SemGroup just filled bankruptcy after a $3.2bn trading loss in commodities. Interestingly, they were short oil, meaning they expected prices to drop. But a wildly flucuating oil market combined with other traders smelling SemGroup blood in the water forced them to liquidate their positions at a huge loss. Thus, speculation may have been directly responsible [...] Gasoline historically has been extremely cheap. It still costs less than beer or most any other liquid. Matt Simmons thinks gas could go to $12-15 a gallon. Demand is increasing while supply is dropping. That’s the problem. He sees the biggest obstacle stopping us from going to renewables is the mistaken belief that oil prices are temporarily high and will drop. So rather than deal with the problem, we’re going on a witch hunt to see who is keeping prices up. Even if we started drilling offshore everywhere now, we wouldn’t [...] If speculation was mostly responsible for the rise in oil prices, then massive intervention by a central bank shorting oil should be enough to drive prices down. But this hasn’t happened. So, either they don’t want to intervene (doubtful) or they know that intervening would do little to lower prices. The Fed and other governmental [...] Matthew Simmons is founder and CEO of Simmons and Co, an investment bank to the energy industry. He says the Tata Nano at $2400 is the future of cars, that the US needs to get off its ravenous appetite for oil now, and that the primary driver of high oil prices is increasing demand and [...] Climate and Capitalism says “Nationalize big oil, enemy of people and planet” but that won’t necessarily solve the problem. The biggest oil entities on the planet already are nationalized. Companies like Exxon-Mobil, are smallish in comparison. Ranked on the basis of oil and gas reserve holdings, 14 of the top 20 upstream oil and gas [...] Meanwhile, the other senator from Connecticut, Loony Bird Lieberman wants to ban institutional investors from commodity speculation, a proposal which demonstrates his almost total ignorance of how markets work. While speculation is certainly part of it, increasing demand and flat-to-declining supply is the more probable driver of price rises. Speculators can and do provide a [...] A cover story by The Economist about high oil prices would, assuming you believe in contrary indicators, indicate at least a short-term top in prices. That’s what The Big Picture thinks, saying “Painful though it is, this oil shock will eventually spur huge change. Beware the hunt for scapegoats”. I agree. |  | ||||
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