Could oil reach $200 per barrel?
Answers
215 points
DirtyD answered one year ago …
Traders seem to think so:
http://www.bloomberg.com/apps/news?pid=20601087&sid=ayQXcHVStlP8&r efer=home
3943 points
MNSL answered one year ago …
Yes. Some analysts and investment banks have forecasted that the barrel of oil will go up to $200 per barrel.
Another group including some investment banks and industrial experts have forecasted oil will come down to $ 70 per barrel in next 02 years. I agree with second opinion due to following reasons.
Most analysts have been positive for oil and other commodities for the last seven years and this is the first time they think there could be really a dramatic secular reversal, that it's not just a pullback.
Second-quarter net inflows into European exchange-traded instruments linked to commodities fell about 58 percent to $800 million from the previous quarter.
The expansion is now slowing. Global economy is slowing.
Growth in USA, UK and China slowing. As a result of this demand for commodities will come down
Some industries are unwilling to pay for current higher prices
Some countries will become self sufficient in grains, such as Maize (corn), wheat and rice
Any bull market will have correction, crash and pull back time to time. We had 7 years of bull market for commodity market.
Even Soros, Top investment Bank analyst and industrial experts expect Oil to come down $70/Barell.
Finally almost all the countries have planed to reduce usage of energy by 10% to 25%.
Now people prefer to travel by scooters and bicycles rather than by cars.
Commodity market is overvalued now. Best time to invest in this sector is beyond 2010. We will see commodity bear market in 2009 and 2010.
Some companies are planning to use their own less expensive alternative energy through out the world.
These ETFS, Deferent types of funds will try to dump their holdings when they see good price for their assets. Everybody wants to make profits.
We can see more volatility in the commodity futures market now. Volatility is a sign for the coming collapse in the market.
180 points
musti answered one year ago …
Of course it could - and it will. The question is when; it could still be this year, it could take another 2-3 years. There are already forecasts well above the 200 $ mark.
That doesn't mean that oil will go up without intermediate pullbacks. However, I don't expect it to fall back significantly into the double digits. All the behavioral changes mentioned by MSNL do happen but i's too little too slowly. Most people in rich countries still don't think twice before taking the car for a very few kms/miles - and the number of cars in the emerging world increases by leaps and bounds.
And do you know how many new airports are planned in China in the next twenty years?
This said - I'd be happy if I should be proven wrong.
114 points
Prosedium77 answered one year ago …
Oil reaching at the hightest of USD 180 to USD 200 per barrel is acheiveable raising to world political uncetainities, climatic factors and natural diasters, and demand and supply of oil. With the high cost of oil and within the fourth quarter of this year, oil shall continue to decline due to spirious inflationary effect and reduction of supply or exports. World wide cutting down on production and financial market world wide are increasing the interest rate. The recent G8 in Tokyo, Japan are more towards environmental issues and production of food crops without arresting the escalation oil prices. OPEC
members are disputing over production figures and oil prices.
3943 points
MNSL answered one year ago …
Now some analysts believe following are possible causes for the declines in oil and other commodities: They now expect oil to pull back to $100.
Strong dollar,
Weakening U.S. economy that is hitting demand
Congressional efforts to bring down gasoline prices ahead of the U.S. presidential elections.
Approach of the U.S. presidential elections in November.
Pull out of speculative funds from commodity funds:
Example: Recently Hedge funds and other large speculators cut net-long positions in one grain futures by 3.2 percent, or 10,782 contracts, to 328,947 contracts in the week ended July 1.
Index funds that invest in commodities reduced net-long positions by 2.6 percent to 417,279 contracts in the week ended July 1 from the previous week, and by 7.8 percent from a record of 452,568 contracts reached in the week through April 29
Many market strategists simply point out that no market can keep rising to new records in a straight line
678 points
BoxCar answered one year ago …
Google "Scientific American". On p.2 read "The End of Cheap Oil" by Campbell
It correctly predicted decline of production would begin before 2010 and prices would rise unless demand declines commensurately. Are we there yet?
I don't think so when I see people leaving their dog in the car's with A/C on
and no one talks of a 55mph speed limit- Yes, oil is headed well above $200....
unless we're seeing the onset of the 2nd Great Depression- that'll stop it for sure
102 points
puppeteer answered one year ago …
Yeah damn right but $200? not 2008 may-be 2011
Read more from puppeteer3943 points
MNSL answered one year ago …
May be it can go up $200 level in 2030 provided we see income growth worldwide It also depend on the new developments in the energy sector.
If oil stays, around $150 to 200, it will destroy many industries and we will have worst depression worldwide.
Unemployment will rise Inflation will sharply increase. Consumer will have less income to spend Demand for product and services will come down drastically Businesses will collapse including banks. There will less savings and investment.
Finally, every body will lose in the short run, medium run and long run. Nobody will have profitable businesses at the end
Now oil market is not mainly driven by demand and supply theory.
There are other market forces also behind it. Some oil analyst also can influence the market because they have built up their portfolios in oil in advance before others. Futures market also can make big difference in the oil market. Then hedge masters, speculators also responsible for higher oil prices.
According to latest energy sources, Oil will stay around $70 or below $70 until 2015. Still it is too expensive to maintain sustainable development in the world.
I think before year-end oil will come down to below $60.
