Like a famous business consultant always says: Prepare for the worst.
Luckily ING does so…
Its predictions will hopefully never come true, as it would mean that the poorest will probably become ever poorer and the richer will be getting richer substantially.
However, I’m seriously considering investing in oil futures under the pretext: If you can’t beat them, join them…

Sure $600 a barrel, I’m all for living in the new dark age. We’ll need Chinese troops to keep law and order.

Why don’t they model their chart on the time previous when oil went to $10 after the spike? What happened to Uranium last year? Look at the chart it looks exactly the same.

The question is not how far the price of oil will climb, but what have Americans done in the past 30 years (since the last oil crunch) to combat a problem that now seems to be surprising everyone?

Bought bigger and less efficient cars, built bigger houses that are even further away from the city, and invested virtually nothing in expanding our public transportation infrastructure. The big companies have a stranglehold on our legislation and marketing continues to dupe people into wanting the biggest and best of everything.

Now, as petrol brings America to its’ knees, we’re “speculating” about how high the price will climb when we should be brainstorming ways to ween ourselves off the addiction even if it is a day late and a dollar short.

Most of the oil currently available is imported both in US and in Western Europe, and woirst of it, it comes from conflict zones or countries that do not have the same agenda as the democratic world. What the US government should do is to restrict imports, and let the price grow even further, and then let the market do its job. With oil at 500$ a barrel you will have a lot more private investment in wind energy, nuclear energy or renewable, that are all home grown, and not imported, and thus reducing US dependency of foreign oil. You can right now see that the car market has changed towards more economical cars. With oil at 500$ a barrel you will see the car market changing further. Yeah there will be hard times, but all to the better. It is not in the period of economical growth that we evolve it is in times like this when we face though economical environment.

Tod,

I am sure we will see oil @ $200 by xmas.It may not be sustained, but a cold snap here and there,a terror plot, Nigerian kidnapping etc etc.
What I really want to see is governments put out correct inflation figures.With high energy bills I am certian inflation is running at 10 % +.
I know my spending power has gone down by 15%,so how can inflation be at 4%?
Time for the truth Gordon and George…

In the short term, I do not think you will see oil approaching the $200 level unless it is caused by non-supply demand issue. Something on the order of an Israeli attack on Iran, major hurricane damage in the Gulf of Mexico, or other political / natural disasters.
As oil keeps rising the demand is beginning to fall. I would think by the time say $175 was hit it is very likely you will see a large scale recession globally with country’s like the US which are very oil dependant being the hardest hit.
Longterm, say +3 years, as economies begin to price in higher cost of oil products there will again be a rise in demand and prices will climb. In the end, oil is finite and as the supplies run out, price will rise

Since 2006, China’s consumption of crude is up by about 400,000 bpd. Yet in April 2008, US consumption dropped by a massive 4.3%, over 800,000 bpd (Reuters, June 30). In fact, this drop is almost enough to offset the total worldwide growth in oil consumption from 2006 to 2007 (990,000 bpd; BP Statistical Review 2008). This one-month drop in US consumption is equal to two years of consumption growth in China and the April drop wiped out one year’s worth of growth from China (325k bpd), Saudi Arabia (149k bpd) and India (168k bpd) combined. Additionally, Chinese demand is falling. From Reuters: “A decline in China’s oil imports in April raised questions over demand. China’s April crude oil imports fell by 3.9 percent from a year ago, official Chinese data showed.”
Common sense says that if there was too little crude oil, why hasn’t there been a single case of consumers not being able to buy the gasoline and other products that they want? If demand is outstripping supply, where are the pictures of people standing in line around the world trying to by gas, as we saw for rice and bread?
World consumer demand is contracting daily. Oil prices will plunge.

Oil price increase has taken a life of its own. Pretty much like how a hurricane develops it starts slow as a low pressure system but once it spins it sucks more warm air it gains more strength. I guess we are in that stage of the oil crisis where it is irrelevant how it began but we all know what its aftermath will be - bright sun in a world landscape littered with economic debris of financial houses built by sheer greed and ruined lives.

If oil prices don’t rise too terribly fast, the rise could motivate innovation and could then be a blessing in disguise. If prices rise too fast for new oil-energy saving products to reach the market, then we’ll have a rough time. It’s probably going to be a bit of both. America, though, build around the car, may have a tougher time than Europe or Asia. Moreover, I heard that McCain is ahead in the polls. He thinks more wars are inevitable. Whether justified or not, even the price tag of current wars could just prove to be too much, and US allies, of course, are not eager to pick up the tab.

Hey Todd u think tooo much. If oil reaches $ 600 a barrel within next 6 years then get ready for world war 3. This is what i think rest people know better……

There are so many parameters that will have a major impact on the price of oil for the next few years.
First of all the instability in the middle east will continue to drive the prices up. As long as Iran will be considered a threat with its nuclear program, the peace in the middle east will be almost impossible to reach. A war against Iran will see the oil price double.
On the other hand Saudi Arabia and the other big producers of crude oil in the Gulf area are aware that if the prices go beyond a certain barrier $160 or $175 a barrel, it will have a negative impact on their economy given that it would only accelerate the research for other sources of energies.
The entire earth is entering in a decade of uncertainty (what I would call a transitory period), in terms of what energies to use, how to distribute it, how to gradually change a hole system that runs exclusively on oil and gaz.
In conclusion I do not believe that any analyst today is in a position to project weather the prices of crude oil will go up or down. One thing is sure the shift in sources of energies is a must and in the long run prices of crude oil will go down again.

I think that the wrong foreign policy of the US is the reason of high oil prices.They are too greеdy to conquer other countries and to plunder them.High oil prices,high inflation,the unemployment,and the financial instability of key US mortgage lending companies is the fair outcome for their actions.

If the US will leave the Middle-East, the price will drop to a normal level. If not, then the price will rise to USD 200 and above. But OIL is more important than people in the eyes of the US. So I think that things will go to the end … global chaos and war.

The very best thing that could happen to the U.S. and the world is $200 + oil. Oil has had its day , time to move on to other forms of energy. This makes sense both for economics and the environment. Alternative energies will create all sorts of new employment plus the air would be cleaner. Sure it would be painful at first, but you know the old saying, “no pain, no gain.”

I say something is definitely fishy about how the most paid people are paid to mostly speculate. Surely, if it’s survival of the fittest, seems like 1st world country elites along with their Middle-eastern oil friends are just squeezing what they can out of the people who they know are dependent on oil. I’d cry in tears of job, when the day comes when 1st world liberalists are no longer dependent to 3rd world terrorists.

America, please Wake Up! Even at $150, the barrel is at about the same price as 10 years ago… if you pay in Euros. Fuel is expensive mainly due to the devaluation of the dollar against the euro, which in turn comes from the gigantic price of making war in Iraq and Afghanistan.
Want cheap oil? Stop printing fresh dollars to finance (useless) wars…

Mihai makes a very potent comment, remarking how humanity reacts in adverse conditions. History reveals this to be absolutely correct - quite a lot of the technology that exists today is based on what was developed as a consequence of war and world unrest. It seems that in times of peace and relative tranquilty we tend to sit on our laurels. This recent spike in oil and the threat it has further to go will prompt various institutions into ‘war’ mode and get them thinking again. It does need to be mentioned that, in real terms, and for quite some time, our consumption of oil is infact falling, that is to say that, the amount of oil needed to produce a product is lower than the amount used on an identical one say ten or twenty years ago. This reduction is of course being ofset by consumption in emerging and tiger ecconomies. Had it not been for this ‘real term’ reduction in oil consumption then oil today at $300 would seem cheap.

We have a way to go but things need to be done slowly and carefully. Governments around the world have the solutions and know exactly what needs to be done, but, there are many considerations to be taken into account. First, the massive investment by the big oil companies need to be amortisised - you cannot bang in new legislation and ideas just like that and then leave the oil companies standing with their hands in the air wondering what the hell hit them; this would have a negative impact on the ecconomy. Structural changes need to eased in and I truly believe that that is what is happening. Manufacturers are slowly, but surely ‘oiling’ in their plans for the future - some a little slower than others. Japan, who has to import all it’s oil is at the forefront, particularly in the automobile sector, the U.S. who has quite a bit of it’s own oil does seem to be lagging some what - this proves, urgency and danger, to be the true mothers of invention.

The other point is, that if oil does reach $200, or higher, the pain felt will, as it always does, fade away as we adjust to the situation. Oil can, at it’s own peril, go to $200 and stay there, but it will lose freinds and the consequences will be irreversible as we perk up the momentum towards alternatives.

It is now estimated that Investment funds - which, in oil trading do not qualify as market prticpants but rather as clients, and therefore do not have to report position sizes to the SEC & FSA - today account for just over $100 billion USD of speculative liquidity on the oil markets. This is now greater that the transactional value of acutal supply & demand for crude in the world today, and given such enourmous extra liquidity, it is fair to say that the price of crude has been somewhat uncoupled from basic supply & demand. There is no shortage of crude for the foreseeable future, and there are vast untapped reserves that have yet to come online, so why has the price rallied so vigourously? Certainly in part, speculative funds are buying as hedges against a weak dollar and as hedges against future geopolitical events (potential war against iran), as well as speculation over future demand from the emerging economies of China & India, but if it were left to pure supply and demand counterparties of physical crude only, i would be surprised to see oil above $90/100 USD per barrel. I guess that’s the price we pay for free market economics. My view? A correction down to $120 USD/bbl by august, followed by a rally to $180 by year end. Beyond that? Depends if the US throws it’s military at the iranians….

Oil at $600 per barrel? Why not $1000 per barrel? This smells of nothing but euphoria. Such heady predictions are made when the prices reach stratosphere and the bubble is about to burst. Has everyone forgotton oil sunk to $6 per barrel after reaching $34? That was not too long ago. Nobody imagined what would happen to subprime mortages just a few months ago. Public memory is short and politicians have even shorter memories.

OPEC is raising price and waiting for the world to adjust and adapt itself for the new price, again raise price. This gradual slow but sure increase over time will not only manage consumption but also speed up our search for alternative energy sources. You are right, $200 a barrel will make some businesses go burst, but the price level will not hold due to political pressures around the world.

Problem is , nobody would like to say it openly , that we are running out of oil .Soaring oil prices are in direct relationship with a fundamental issue of diminishing global energy resources .What’s more , inventing an electric-run vehicle would not resolve a problem , because where from to take a cheap electricity?Probably a power prices would soar the same way like oil now .Until a humanity does not find an energy -resource other than based on earth - stored commodities (like oil , gas or uranium) , we can expect a long term energy crisis.It seems for me , a single solution would be a thermonuclear -fusion , but for it we have to wait at least a decades .

Well, $200 barrel oil, man that sounds bad but first it was Favre retiring and next Budweiser goes to the commies in euroland. Time us Americans claim that oil for ourselves while we still can before a mine shaft gap!

The price of oil is controlled by Al-Quaida and will rise to more than $200 a barrell. Al-Quaida gets a commission to increase its rerrorist acctivities. They are hell bent to see the fall of America and have succeeded to a fair extent. More will follow!!

Completely agree, it is not about the price of oil but about the value of the dollar and the risk of it being replaced as a worlds leading currency. With the US treasury supporting Fannie Mae and Freddie Mac as well as bailing out Bear Sterns, it just takes all this debton its balance sheets, with the outcome of printing more money. So yes i believe oil will rise and may be 300 or 500 dollars a barrel, just depends how much money will be printed, however in real terms oil will cost the same. Will be interisting to see if the 10 year us treasuries stars raising in yield as it is no longer considered a sefe heaven for investors, even if the fed keeps us on hold. Thank you ECB…

Naturally the oil price is meteorically shooting up due to an excessive demand compounded with alleged decrease in supply. The whole world is made to believe this increase in demand is due to growing markets of China and India . Is this really true ? However the fact is USA is still the biggest oil consumer in the world and their insatiable demand could be due to primarily greed, mismanagement or are they buying more oil in anticipation of invading another Middle East country….?

Americans drive huge cars, fly obsolete inefficient aircraft, recycle nothing they are the most wasteful people on the planet. The US$ as a standard of currency is finished. Laurent above is correct, only America and those with US$ have a problem with the price of oil.

We keep on talking about rising oil prices. The cost of production of oil has not risen. The fall in US dollar value also cannot explain this rise. So the main reason appears to be forward trading and a lot of money thrown in this business.

The only way to bring it down is to cut down on its consumption. If the users of automobiles in the US drive only 10 miles per day less than what they currently do, the consumption in the US will come down by about 8-10% which can then reduce the world consumption by about 2 to 2.5%, enough to bring down the oil price just in a few days. OECD countries need to take a lead in reducing the consumption. China and India need to reorient their policies to have mass rapid transport system instead ofpromoting the concept of personal vehicles.

Is it possible to consider imposing a FUEL TAX on all exports to countries enjoying benefits of fuel price hike?

I mentioned this on another cnn blog post a while back. It deserves repeating as I read Harmen’s intent to “join them” in buying expensive oil.
—–

“Buy low, sell high.” While I’m not certain when this phrase was coined, I suspect at least the concept came about around the same time as the concept of Value was invented - thousands of years.

Historically, when you have an inrush of novice investors they tend to swarm around market changes. They lose sight of the concept of buying low and selling high. Happened in the 20’s, happened in the 80’s, it’s happening now too.

Real estate values climbed as much as 30% during the housing boom. I don’t think it’s coicidence that the price of oil has jumped well over 30% since January 2008.

Has demand increased 30%? Nope. The projected global increase in demand for oil is 1.28%.

When you have uninformed, panicky investors running about with more money than sense combined with uninformed panicky newspeople looking for a good story, you get interesting things like supply curves that magically shrink to impossible levels.

“The world is consuming more oil than it is producing.” –The Economist, July 14-20 print edition.

Even venerated publications like “The Economist” are parroting ideas that break the the laws of physics and economics. What’s worse is repeating this lie over and over again is causing the uninformed to shif their money around because of this rediculous prophecy.

Even funnier than that is the fact that the US demand for oil isn’t inelastic as economists had been saying. We’ve found that US demand is shrinking and, under pressure from world leaders, the oil suppliers are increasing output.

When reality hits… We’ll have another multi-billion bailout of investment companies and the companies and people who produce Value in this economy will bear the brunt of the load for the ignorance.

I’m a bit of a sports car nut, and have a coupel in my garage, so you might think I’d be dismayed about the current problems. But not only do I think $200 a barrel is quite possible in the medium term, but also that this is a good thing. In relation to price, the obvious considerations will continue to apply - remaining supply is finite, worldwide industrialization *will* drive demand in the medium-term, remaining oil reserves are considerably more expensive to mine, and that the largest reserves reside in very troubled countries and therefore can be disrupted at any time… Why do I think all this is a good thing? Simple, we desperately need to ween ourselves off oil as a primary energy source, or risk catastrophically damaging the environment. Time is not on our side. Oil should be reserved for sports cars and planes (really!). Luckily the market is a wonderful thing, and higher prices will very effectively drive the search for alternatives, which will likely eventually succeed. For example, look at the promising progress of fusion research by EFDA-JET… now compare the money being invested in that to the money we currently spend on oil. Any rational analysis would conclude that this is under-invested. We need higher prices and conflict-related supply problems to make our energy investment decisions more rational! Bring it on.

Good thing we still have bullock carts & horse carts in India!

Yes most definitely oil prices can and will rise upto $200 a barrel at the rate its going. The way the oil prices are increasing I say it will increase even more by the end of 2013. The impact would be really bad coz oil is one of the most essential things in all countries, I mean think of it if oil being sold for a $200 a barrel…. the outcome for the rest of the world will indeed be in a bad condition. This is going to be crazy!!!

Giving the way we have dealt with the world in the past 50 years, the responsibility that we have taken to secure the world for future generations, and even the current (re)actions of the political layer responsible for governing this earth, I would say >$200 oilprice is only a blessing for the world at large. Yes, we will suffer from it, the poorest hardest, but eventually the economics will finally dictate what our past governments failed to do: stop wasting energy, and put our capital in sustainable energy sources. I believe it is only the power of oil that has prevented this. If 20 years back, oil would have risen to $200, we would have been well under way to lower our dependencies on fossil oil. So let it rise!

Why are those highly industrialized countries not united in their fight against those responsible for high oil prices (mostly speculators), those people are threatening world peace and forcing economic hardships on millions. It´s like your sitting idle while your enemy is invading your country.How is it possible, a bunch of a few greedy individuals can hold the world at “gunpoint”, going away unpunished and undeterred?

higher prices should ration demand. I believe, to a degree, theres an equilibrium between supply and demand at this point. I also believe the advances we are seeing are more a function of speculative actions by traders coupled with a weak US dollar rather lack of supply. Should prices continue to appreciate then its about time we seriously identify and implement alternative power sources rather than maintaining the NATO attitude ie No Action Talk Only. If we are serious about this then maybe the thought alone might be enough to contain further price appreciations.

There is absolutely no reason in term of supply and demand that warrant high oil price that we are seeing.China only uses at most 10% of world oil output and given GDP growth of 10% , this is translated to only a mere 1% increase/pa in term of increase in demand versus world oil supply,where-as oil prices has gone up 300% in just a couple of years.

If the speculators activities are left unchecked and undeterred, oil price
can go beyond USD 500/barrel, and it has nothing to do supply and demand but greed and greed and more greed !!!!!

Oil speculators are the world’s worst enemies and criminals today given the untold sufferings from the world’s poorest. They are worse than the criminals in Darfur, Tibet and Zimbabwe.

Oil at 200$ is unfortunately possible and in fact likely.
The question is when?
Around 300$ a baril, our economies and lifestyles will have been changed seriously.
Maybe for the better. The transition to something new remains a big question mark. How fast, how painfull?
I am confident we will proudly pass this unprecedented world test.
There will be a world before and a world after cheap oil.

A stronger dollar would keep oil prices in check. A report in FT Deutschland ( no longer a sister paper of the FT London btw, but is German-owned now) quotes opinions that too many times Bernanke and Paulson have said they want a stronger dollar, but done nothing to bring that about. Now the problem is not inflation, so the report continues, but the fear that the dollar could lose its slot as no.1 world currency and the preferred currency for investors to hold assets in.

Seems the Fed and the Treasury are walking the talk now, bailing out FNM and FRE. Possibly a rate rise from the Fed is unavoidable, as the only way to strengthen the dollar significantly - and hit speculators? Then will it be back to a repeat of the “Really, we DO want a strong dollar” mantra ?

Oil is in a classic bubble and bubbles burst. Late this summer the price of oil could reach $160 p/b and then drop to $80 p/b by year-end. This is according to technical analysis. The fundamentals would be a full blown recession, which is already looming on the horizon.

of course it will because people like you keep predicting it. it’s what they call a self-fulfilling prophecy. i wish people would quit making their predictions and actually make a contribution to society. here’s prediction i bet the traders on wall street that keep out-bidding each other are making a killing. oh look it came true.

When I see the price of oil go so high that hard working people in America are put in a position of not being able to feed their families properly it makes me wonder how greedy people across the globe can sleep at night. I have an answer to this problem: for all those scumbags who are raping America over oil - you want an ear of corn? - $20, you want a bushel of wheat? - $200. Are you getting the idea? The U.S. has muscle - we just choose at this time not to flex it. If these dirt bags can sleep over grossly inflated oil prices then I can sleep over inflated food prices. It is not a good idea to be an enemy of the people of America.

With consumer technology advancing day by day and even fuel options are developing every day and bio fuels, I dont think the prospects for Oil bears forth a bright future. A time would come when the cartel would be begging the world to forget about the options and rethink of using oil as fuel again. By that time I guess the world would have become wiser, unless a time would come that oil would be considered as a cheaper option to the other energy substitutes already developed by then, which is very unlikely.

I was heartened to see the first hearings to regulate oil speculation on television this week. I know that the liklihood that any kind of real formal speculation regulation will come to pass is remote, but I am glad that at least some industry analysts and commodities market experts finally have the guts to admit to what is going on.

They need to be so brave because the all serving need to earn and for ROI is now threatening the very lifeblood of our economy.

The solution is clear - regulate speculation to at least temporarily get some breathing room while we transition out of this fossil-fuels based economy that we live in. However, everyone is too busy trying to find out who is (or was) at fault to take the time to work on a solution. This isn”t about finding who is at fault. It”s about working towards a solution and allowing our global economy to continue functioning while we get there.

The good news: in April 2008, 54% of all petrol products sold in the USA came from USA/Canada/Mexico. So we’ve only got to double production in our own neighborhood in order to stop funneling money to the dictators and terrorists. We’ve definitely got the resources to double production, now we just need the political will.

HIgher prices will finally force people to change their attitudes towards energy use. We have some serious environmental issues that we love to ignore, and while the change in attitude will be based on economic rather than environmental concerns, it will be for the best. Yeah it will mean some serious lifestyle changes and tough times for the west, but life as it is now is unsustainable. I say bring on $500 a barrel, it will be the single greatest driving force behind any future clean, more efficient technological development.

This is no no no not interesting My Buffaro

As a Norwegian, I suppose oil at $200 would mean that our state owned sovereign wealth fund would become even bigger than today’s USD 300 billion. In addition to being one of the world’s leading oil exporters, Norway also has the highest gas prices in the world already. We pay more than double the price that the US consumer pays at the pump. 70% of our gas price is taxes to the already wealthy state purse. I suppose the effect of 200 dollar oil in Norway would be both positive and negative. I think the total effect would be negative, as the economy of our important trading partners would be severely affected. However, I think Norway is one of few countries that would be a bit insulated against the short term negative effects of such a price hike. Maybe’ I’ll see you Todd, at the ONS Oil fair in Stavanger in August? I live in Stavanger, the oil capital of Norway.

Although the rise in oil prices can be atributed to supply-demand imbalance to some extent but much of it has to do with the disputes surrounding the regions holding the treasures of crude. At last America and Western Europ have started to harvest what they have been cultivating all over the world. These developed nations and so called big powers have been nurturing disputes everywhere through their support for illegimate rullers and tyrants against the people. These powers have always been benifiting from these ruthless deeds but finally they have started to reap the fruits. If the surge in fuel prices went on in the manner it is going right now then it will definitely cross $200 level by the year end and will put America in the deep shit of recession.

Nobody talks of the “other guys making a mint” … the government! In Germany the government earns 70% in taxes of every litre of gasoline! Does the government have in interest in seeing prices going down, in cars using a different energy source, one less easy to tax than petrol? Most western governments would go bankrupt in no time if they had to give up taxing petrol. So much for your “white mafia”!
Still, rising prices are the best way to bring all those idiots in the industry down onto their knees. Volkswagen says they have the one litre per 100km car … but they shelved it some years ago. Instead, every automaker is producing even bigger and more thirsty cars than ever before. Great if this nightmare comes to an end! Hey, walking or riding a bike is good for your health, driving is not! Let’s have oil at 300 bucks a barrel, I’m all for it!

When you ask a person from the Middle East what the best
price for oil is, the answer is $10.00 a barrel and $100.00 a barrel.
10 to keep us addicted and 100 to make a nice profit. We
deserve what we get. @ $200.00 a barrel, we start to think
seriously about our future, so bring on the high prices.
We need to clean up after the party we’ve been having
all these years.

7-14-2008 I do not see the price of oil going to $200 a barrel. No business can afford to price itself out of the market. As the price of oil goes up there will be less demand as the poorer countries cannot afford to buy oil at such high prices. $200 a barrel oil will also force may businesses to turn to alternative energy sources. Oil companies are not stupid. They want to make money not force a reduction in sales.

Ah, nice to see the “blame US first” fanboys out in force.

The US has been too dependent on oil, the policies of the last 8 years of a corporate run White House has been a complete disaster and with friends like many in the world, who needs friends? As for invading another mid-east country, there is no support for it here. The lies of this administration have soured the US populace so don’t worry about that.

If you want to look at a country who invades another and sucks it up, look at China. As for disgruntled Europeans, who cares what they have to say. They won’t even work in their own back yard, Kosovo, to help others as it might “involve hardships” then whine, “Why isn’t anyone stopping these atrocities”?

I will admit the US really has no business in the Middle East. The truth is that the sooner we get out of there and stop supporting countries based on religious or greed, er, merchantile concerns, the better off we will be.

Already the US is cutting back, way back, on oil. Hopefully we’ll see many more nuclear plants built and built correctly in the US, like they are in France. With any luck the oil companies and those that run them will have killed their cash cow. Cleaner, renewable energy is what I hope will come from these high prices.

The best thing the US can do for the world is get off of oil, conserve and find new energy resources.

The problem is clearly speculation. Some economists say that supply and demand are the cause, but that contradicts the fact that there is absolutely no shortage of oil right now. Investors are speculating that demand will outstrip supply in the future, but as Jay Leno said, “They say what’s driving up the price of oil is the belief in the futures market that there will be a shortage in five years. OK, so raise the price in five years!”

Can you say, “Worldwide recession, if not a depression, that lasts five to fifteen years?” Until we develop widely available alternatives to fossil fuels, we’re basically screwed.

the funamental questions is,how far the ameracian interest go to one governor,so there is no surprising if oil price going to 200 or 500 dollar,the centeral importance is what is the next, soon or latter the oil will end in 30years,in other hand,at this moment there is more then 4billion cars in the world,i can’t even imagine in 20 years there well be cars more then human population,so the only governor of american corruption will investing the oil for own interest process.

Its about time we wake up and face the fact that these high oil prices are long over due. This so called black gold is destroying our environment and the only way we will look for alternative energy is if the prices keeps going up. The big oil companies don’t want to invest in alternative energy because they are making huge profit and it is in there interest to prevent this from happening. If we all change our ways and drive smaller cars until we have hybrids or others on the market, then we will automatically cut the requirement for oil by a huge margin. We’ve used and abused and it’s about time our planet got a breather from this dirt. It’s a lesson to all of us invest on cleaner more efficient alternatives. Spare and repair our planet!!

Whatever happened to strangling the golden goose??

People need to understand the concept of equilibrium. The price of oil will increase until the demand drops and equilibrium between supply and demand is reached. China and India are not going to suck up every last drop of oil because they can’t take the high prices any more than we can. The demand from China/ India will drop as fast if not faster than that in the US. The problem is (as I understand it) that there is a lag time of several months in getting any good info regarding demand/ use. For that reason I predict the price will overshoot leading to a crash in demand and then price.

Developed countries do nothing but come here and exploit our resources by waving fat chequebooks in the faces of our corrupt governments in return for what they want to dig out or tap dry. We are not the benefactors of these large corporate deals, they are. I can not wait for the day to see these bastards where they belong - on there knees!

So, let oil prices shoot through the roof! The thought of a cleaner environment will make the hardships to come worth while. I am an African, and here it is overcrowded with useless people that do nothing but wait for Western hand-outs. If we, inhabitants of the poorest (and least productive) continent are to suffer, so be it. I care more for nature than people anyway.

well I DISAGREE WITH LAUREN when she says that only America has a problem with soaring oil prices!….its a problem of the whole world!!!!!!..except ofcourse Saudi Arabia as they are the largest exporters and producers of oil. Specially in Pakistan where the value of rupees is diminishing, soaring oil prices are like a bomb shell!..likewise, not only America but the whole world is concerened and this must stop before people actually have no other choice but to put themselves to death!!!!!!!!!

I think, the game just started, starting with the subprime mortgage crisis, those who lost their money, will sure find a better way to recover the lost, the fastest way is the oil price speculation, to sustain high oil price, need some issue, so approach Israel to attack Iran. The corporate may also involve, as the world is toward to green energy, oil companies thinks their era is about to over, this can be happened, need a revolution in their energy policy, that is to invest in green energy, sure this needs a lot of money, so they also think what about if we (CEO) say there is a short supply and the world oil reserve is about gone, the result will be again, high oil price, then the profit they receive from this high oil price can ensure their future in green era is still bright

I saw a BBC aired special edition of Panarama which speculated on such a situation arising and how it would affect the US. Essentially it predicted that there would be a real possibilty of over 25% unemployment and the price of oil would simply rise higher and higher as China would be more willing to pay over the odds of for oil than any other country.

The concluded that it was the fault of the USA and the EU leaders for not abandoning oil completely in the 1970’s when it would have been much cheaper back then to do it and would have had much less impact on both regions.

Corruption, its the reason why oil prices will jump to $200 and more. Like ENRON who created gas banks to trade oil, buying it cheap and then selling it at a crazy price giving none sense excuses in order to have profit. Like Wall Street Stock many people are buying oil and they wont let oil prices go down, only up and up and up and up until a great tribulation comes all around the world as its written on the Bible. Only God will save us from the disaster we will face. What will you gain by winning the world if you pay by loosing your life?

I say bring it on. It is only this situation that will bring us to our knees and kick our butts into action to find alternatives to our dependence on fossil fuels. Unfortunately we are only driven to do something when we have no other choice. The road to easy street is riddled with giant pot holes now. No longer can we just say that it is not our problem. We are responsible for our own actions and we need to suffer the consequences. Need I remind you that it is a growing concern amongst the financial community that WATER will be the next “commodity” to open our eyes to the ever wasteful practices we are guilty of in our lives. What will we do when water is at the same price as our precious oil?

The truth . . . is that at $300 it is global black-out, so it won’t get that high.
The truth . . . is that growth of wealth around the globe is unsustainable at this pace, so high oil price is the only way to cool it down a little, to a more moderate rate. (and “global warming” helps in the same direction).
The truth . . . is that we all will have to tighten up a little in order to avoid the catastrophe of higher prices due to higher wealth, (unlimited growth=unlimited price).
The truth . . . is that all this is to prevent a worse scenario. There is not enough resources in the planet for developing countries to develop.
Sure there is trouble ahead, but at least no total blackout.

In regards to the question of where I think oil prices are headed, my answer is that the future price of oil is irrelevant.

Within a year our daily production of oil will start to decline. You will start to hear news reports stating that the production of oil is decreasing. Everyone will be shocked, asking how this is possible.

To my dismay I read very little regarding the peak of global oil supply in the responses. All I read are reasons such as traders are to blame; it’s a supply issue; suppliers are hoarding; and it’s the weak dollar.

It seems to me that the world is in denial regarding the physics of oil supply. The supply of oil from any well is dependant on the amount of oil in the well. As the oil is produced, pressure drops and production decreases.

Peak oil is not a new theory. It successfully predicted the peak of oil production in the lower 48 states of the USA in 1970. None of our advanced technology has been able to reverse this downward trend. But people gleefully ignore this fact.

Let me ask you this: Why are the markets not reacting according to the laws of supply and demand? As prices rise, more supply should enter the market. A country like Mexico stands to win right now by just pumping more. They have no reason not to pump more. Yet they are pumping less and less. Why?

During the last oil crunch at the end of the 1970’s large amounts of oil where discovered, entered the market and the market experienced over supply.

The same drop in production that is occuring in mexico is occuring in other parts of the world like the north sea and Indonesia. Indonesia was part of OPEC, but had to pull out because it had become a net importer of oil.

People are not even considering the possibility and consequences of a drop in global oil supply. Do you know the correlation between the USA GDP and the USA oil consumption is 97%? The same strong link exists between oil consumption and the money supply.

Oil is a requirement of a modern economy. Don’t you understand that once daily oil supplies start to drop that the GDP will start to shrink, the income per capita will drop and that the world will experience a full blown depression?

This is why oil prices are irrelavant. The shortages that will result from a decrease in oil production and the shrinking GDP is very relavant.

What terrorists, what financial stupid theories, it’s simple 3 important issues to live food, clothes, roof. How many of the people are earning because of giving a service that is only giving value to the very rich ones who are about 1% , all rest are usless. No free lunch - only the needed shall be left. Enjoy the trught and try to grow some vegy in your garden for the comming december meal. The decade of finance sector is over time to calculate in sources and only sources. Who believes in the Al Q thing we in the east europe definatelly don’t with such devices it is impossible Osama’s to exist if he was not supported by the ones who invented and use those devices. Take care USA its same story going all over the planet

I reckon there is more energy in a can of wood than a can of oil; so I have already started on the wood option! The oil price will stabilise, despite the human “parasites” engineering the upward trend; oil shortage, refining capability shortage, what a load of rubbish, and when people/organisations NOT involved in the whole “game” and expose the fraud, the “holding the world to ransome” oil scam will setlle down. Just another example of a very few people saying “stuff the rest of the world, we’re making good money!” The very fact that a commodity so crucial to every living person on this world, in some way or another can be corrupted in such a way, really shows the present state of our world. In the year 2008, it should be a whole lot better for probably 70% of our population. On the other hand, “what goes round, comes round”, will certainly be the case, and this will inevitably hit the “more comfortable” more than the “less comfortable” of this world.

If De Beers put just 25% of their hoarded stock of diamonds on the market prices would crash. If they put 75% on the market we would be able to pick up a nice diamond ring for about the same price as a Swatch.

A clear example of how to maintain a good price, and in this example, the element of glamorous scarcity. Lest we forget the last time opec surrendered to the demands of the west, oil dropped to $8.

But all this aside, people are clutching at straws, looking for what they believe to be the most appropriate explanation for the current scenario. I have never underestimated the power and influence of the most powerful governments on our globe, this leads me to believe that on many occasions, things that happen do happen because they are either allowed to or indeed provoked. The weak dollar? Does anyone have any idea what a strong dollar does to the U.S. balance of payments? They run up negative balances of 60b dollars per month, as they have been over the last decade. This can’t go on indefinately and you won’t hear the FED too often calling for a weaker dollar (despite the fact it is, now and then, in their interest). The U.S. has to fund this deficit with bonds, but how many bonds can you stuff down peoples throats. Solution, let the dollar drop. Unfortunately, this has consequences for the rest of us, but hey, poo happens, and I believe the U.S. is correct in ‘allowing’ this to happen, it’s a temporary manouver to allow a positive readjustment. We want the U.S. to continue consuming our goods in the same way that a careless bank manager gives you credit regardless of your financial status - look what that brought about.

Let the nature of things take their course - quite often, a medication to cure one ailment can temporarily upset another part of the body.

200 a barrel by the end of the year,no it will be much higher I think if there is war with Iran whether started by the US or Israeli’s probably 400 per barrel if that happens.

Otherwise if were lucky and no new war happens the price will rise above 200 per barrel simply because of all the new drivers India,and China will be adding in the coming year.

But is it really a bad thing?One it will force Americans to drive less,two end the riegn of the SUV,three it create all sorts of alt-energy/fuels tech with the new jobs new indusrties create.Oil is a dead-end and with high prices many around the world are coming to realize that.

And of course people should also look at what Gulf oil producers are doing to realize they also know the oil boom is over with their creation of soveriegn wealth funds they are investing in their tomorrow a tomorrow without oil.

A question to many of the posters on this blog, and to Todd all of whom are certainly more knowledgeable than I… is the high price of oil due to political or psychological factors, or has oil really been so overvalued for so long? The way out of a crisis such as this seems to me to depend on the answer to this question. I realize this may be just rehashing the “speculator vs. demand” debate, but it seems to me no one is really tackling that question in a thorough, convincing way. That said, a sharp downward spike in the price of oil wouldn’t surprise me a bit if it were to happen in the next couple of years.

just to say to Todd, it is refreshing to hear on CNN and to read in his reviews, opinions that arent dominated by the need to be overly optimistic,or uninformative, such as one sees on CNBC or BBC.It is important for financial tv to be realistic and thoughtful, and Todd achieves this, and Im afraid the tedious self congratualatory reporting by CNBC, most obvious by the likes of Larry Kudlow, and what appears to be simply a poor understanding of all things financial on the BBC, make Todd the only person worth not turning the tv off for.Please, keep it honest, and thoughtful, and fact -filled, so that watchers and readers are able to continue to make informed decisions, rather than just being told to buy, as per analysts notes, cnbc and Kudlow in particular.thank you Todd

By the way, how confident are we about Saudi Arabias reserves? What if the pressure of the wells start to diminish soon? What if Saudi Arabia suddenly issued a press release saying that the recoverable reserves are only 50% of the previously reported? Isn’t it so that Saudi Arabia has kept their reserves numbers unchanged since 1979?

If we get a surprise from Saudi Arabia, the sky is the limit for the oil price. Almost all other oil regions are in decline.
Why not shed a light on this important matter, Todd?

The fact is that oil production has peaked and prices will rise to a level that depresses demad to match the declining production - think back to a simple and typical demand and supply graph.

It will actually be good if oil prices rise rapidly to $ 300 - 400 a barrel. We have already squandered a lot of this very precious ‘reserve’ on foolish pursuits. We need every remaining drop now to retrofit the world economy in a way the drastically reduces dependence upon oil - something that should have been ‘planned in’ long back. This can, and will, happen only if the price rises rapidly enough to ’shock’ the world into action.

For sure, life as we know it, is going to change in the next 5-10 years. How well this change is managed will depend upon the foresight of our leaders (disappointed already?) and responsibility shown by individuals.

When you look back at $ 200 a barrel 5 years from now, you will long for the ‘good old days’.

Hands up all those who get just a little anoyed when the weatherman/woman on T.V. spends five minutes talking about the weather that has already happened and just fifty seconds on tomorrow’s?

Isn’t this a similar scenario with most financial commentators? What makes us sit up and listen? Glory and bust stories. And on every occasion, the commentator ads a little licence to spice it up, that is to say, he/she can make grey look either black or white.

Over zealous or doom gloom commentating, depending on who is doing it, can move markets. If Todd feels it his duty to report on just the gloom side, well, that’s his choice. I have just read reports comming out from the U.S. from various companies reporting higher than expected profits; U.S Bancorp, WW Grainger, State Street Corp and Johnson & Johnson to name but a few. Weekly highstreet sales are also up by 1.2%. There, a 100% positive statement (fact) to counteract all this “the end is nigh” nonsense.

Balanced reporting tends to keep things in perspective, although perhaps not as interesting.

“Most of the oil currently available is imported both in US and in Western Europe, and woirst of it, it comes from conflict zones or countries that do not have the same agenda as the democratic world.”

Not true.

The largest percentage (by far) of American oil imports come from Canada.

Oil at $200 a barrel.,. scary thought, however, I agree with the ING assessment in the article, namely, $200 is not sustainable simply due to the ecomonic damage that would follow.

Despite the ‘core’ number, inflation is inflation whether it be wholesale, retail and rising energy prices is inflationary. As a country we have nothing to compensate for the higher prices in terms of income due to the credit crash, so we will have to bear both inflation and unemployment.

We only need to look in the mirror. Everyone bought an SUV (even with rising gas prices) and viewed their house as large ATMs. We do not have the infrastructure to support public transportation, and now we will no longer have the funds to make such investments.

Not to bring politics into this, but the country supported a president who led us into a war that had nothing to do with anything. He gave up golf as a sacrifice for a while. What a guy! Wow, what kind of investment could we have made in our own country with the money spent in Iraq? Where could we be with public transportation? Where could we be with alternative energy sources now? But according to Cheney, deficits don’t matter. Oh yeah? Who will finance our deficit now?

On the positive side, my family were at the Boston Musuem of Science the other day where we witnessed a presentation on alternative fuels. These technologies aren’t panaceas, but they do work and will help. This country needs to look inside itself. Do we want sustainable energy supplies that help reduce the political risks associated with oil?

We need to reflect upon the last ten years and asks ourselves where we want to be in the next ten… surely, where we are now is not it.

I think that is a possiblity. However as we have seen in especially the last few months, how the cost of gasoline consumption has gone down, I don’t think oil will pass the $200 a barrel mark.

This is turning into a pshychic game for the world. The oil-producing nations are having their say right now, however they should also know that folks can only go so far when it comes to oil prices. As the oil prices increase, there is a sharp decrease on the oil consumtion. I don’t think this sharp of an increase in price has ever been witnessed before, and so I think till now public was hoping “waiting” to touch it out until it lowers down. The prices didn’t come down….so what happened….people started cutting back on their consumption.

I think before we forcast the price range/barrel for the year, lets turn back to basic law of economics.

Demand = Supply

I might addd…

Price = demand

Until now we were in the “bitting the bullet” mode….and waiting for the price to come down, but I think now we have kicked out of that mode and have cut back our expenses.

People are smart and find ways of cutting back in oil consumtion. Cutting back on gasoline is one way…but not the only way.

So I think as the oil hits that threshold price range, we should see further sharp decrease in oil consumption. That threshold is also coming up very soon….way sonner than the $200/barrel mark.

Decrease in oil consumption would hit the hardest the oil producing nations. If they don’t think about this…and keep hitting public with the raised prices, I don’t doubt seeing more electric cars around….already am seeing more than usual of them out there.

Public has started looking into alternatives…..and wrost for OPEC nations….these alternatives use very less gas…if at all. As these alternatives grow from electric cars…..greenhouses…..more solar energy harvest amoung houese……etc etc….which I don’t see out too far…the oil price will come down as a faster rate than it went up.

Well I am optimistic becasue public is smart and I have faith in them. Lets see how fast we get to that threshold price.

ITS NOT ALL ECONOMICS, ITS MORE POLITICAL UNCERTAINTY/PROBLEM THAT WILL DRIVE OIL , WAY ABOVE $200.00.

BUT THEREAFTER, ECONOMICS WILL DRIVE THE SUPPLY/DEMAND FACTOR WHERE OIL WILL FALL LIKE A ROCK INTO THE BOTTOMLESS SEA OF MISERIES PRECIPITATING A NEW LONG TERM ECONOMIC ALIGNMENT WILL RISE AND A CLEANER ENERGY GENERATION WILL FURTHER DETER THE NEED FOR MORE OIL , DAMPING ANY FURTHER DRASTIC INCREASE IN PRICES. THIS IS OUR MOTHER EARTH NATURAL HEALING PROCESS AND SELF PRESERVATION DRIVEN BY A HIGHER DIVINE PRESENCE/GUIDANCE.

I sincerely believe that oil prices will continue to climb until alternative sources are made available that will make oil secondary for heating, transportation, etc. which is only the beginning. Oil won’t last forever. This should be a wake up call to seriously begin developing replacements for it.

In the the words of Thomas Payne
“tis’ times like these that try men’s souls”

I am a pilot flying widebodies for a major carrier, and the thought of oil at $200/barrel is scary to say the least. I do not believe that the market can support that price let alone $600/barrel. The problem is people need to get from A to B. America is not like Europe wich is so condensed that it is possible to walk to many places, instead of driving, or flying. Our country is too vast for a public transit system of the scale we would need. And all the environmentalists and tree-huggers, who want to kill us SUV drivers, do not understand that there really isn’t a substitute to create the 240,000lbs of thrust needed to get my 747 off the ground. It took nearly 100 years since the advent of the petrol engine to develop the Turbojet engine, and even longer to develope what is now used, the Turbofan engine. So it is not as simple as a hybrid or changing a few parts to get the airliners of the world to fly on anything other than Jet-A Kerosene.

Simple supply and demand, if the price is set too high, this inelastic good, will become elastic. When prices are as inflated as they are and people aren’t getting COLA’s (Cost Of Living Adjustments), they simply cannot afford it. I think at $200/barrel our infrastructure would fall appart, let alone at $600/barrel, the sky would be falling for the United States. That would be the time for me to put my fluent French at work, and move to France.

When people say Americans have done nothing about energy in 30+ years, consider manufacturing efficiency is higher than ever. Although people went to bigger cars along way, consider their MPG compared to the cars of the 60s and how much cleaner they burn that air. Yes they could have not gone with cars as big, but in 1972 if you had a car that got 25 MPG that was extremely rare and unusual. I drive a medium Saturn and get 36 MPG which is better than my previous cars. 68 olds got just over 20MPG. 86 Buick got 30MPG and my 2001 Saturn gets 36MPG. We have also learned to keep houses more insulated so yes we have become more efficient, but more improvement possible. Go visit China and look at their fuel and air efficiency and see who is more efficient (I have been there in 2005)

I’ve heard all the hype about drilling off-shore and in Alaska, in order to increase our “state-side” supply.
A recent claim by a guest TODAY on CNN is that by doing so, we can drive the cost to US motorists down to $2 or so per gallon.

So, say we increase our domestic production from, say 20% to 30%, how might this actually reduce price?

My REAL question: are we charging ourselves less per barrel for oil than the world market gets? I suspect NO. I

f not, how is increased domestic production, no matter how much, going to reduce the price??

Currently down by over $8 - these large intraday swings are quite significant, it tends to be the fisrt warning signs of not to distant (heavy?) falls. The same usually happens in stock markets. I have said that we would eventually adjust to oil at $200 or higher, but I still don’t feel we’ll get that high, infact, $100 or lower before the season of goodwill is what my waters tell me. No disrespect to the arab nation but they are a lot more business savy than they used to be; they know that exsesively high oil is in nobody’s interest. If we could just get a little more political stability in the world we could see $40/$50 a barrel again, perhaps thst is the price that everyone could live with. India and china’s infrastrure requirements both in oil and commodities can’t last that much longer - they can’t build bridges on top of bridges.

Yes prices will hit $200 a barrel it’s a matter of when. They will also hit $600, as supply continues to fall and demad from industralizing countries like India and China continues to increase at the rate it is at oil prices only have one place to go, up… For those of you who place your hope in off-shore drilling or ANWAR to increase supply and save the day I suggest believeing in alternative fuels instead. Off-Shore Drilling and ANWAR are very temporary solutions to a long term problem and that problem is a lack of an unending supply of oil… Hubberts peak shows us clearly that our supply of oil is limited and we are close to (if not already) using half the supply of oil on Earth. But if you do not believe Hubbert then look towards Canada… The US gets a great deal of oil from the Tar Sands in Canada, which is a truely inefficent method requiring 2 barrels of oil to be invested to obtain 3 barrels of oil. Clearly merely pumping it from the ground would be cheeper, faster, easier, and a less costly method.

So going back to the origional question, Yes oil will hit $600 a barrel, eventually and probably sooner then most think. But considering current alternatives a $200 barrel of oil is still relavitvely cheep source of fuel. The future brings a less leasiurly ideal of transporatation, where people cannot simply come and go as easily as they once did. US cities are ill designed for situations like this. The future will bring about new methods of public transporatation and air travel for only the elite.

And thats about all I have to say about that… lol

Prices have tapered off because investors are realizing that they’re sowing the seeds of their own demise if they keep buying like gambling addicts.

Oil won’t go to $200 a barrell simply because supply and demand do not support these prices. Oil production still meets or exceeds demand regardless of what the price reflects. This is nothing more than a bubble. Supply and demand is not driving these prices any more than high corporate profits were driving the dot com bubble. This is all about the dollar. When the credit and housing market recovers, the grossly undervalued dollar is going to surge taking oil down with it.

Hi, Todd!

in my view it is quite a realistic scenario that the price goes beyond $200 by year end. but the question is whether China, India and the other emerging economies will still have a comparative advantage facing such high prices of crude oil.
Although history never repeats itself, it does follow a similar pattern. between the 16th and the 17th century the price of charcoal in England increased a lot because there were not so many forests in Europe left. People had to switch to coal, despite the common belief that coal is very toxic. thaks to this change, the Industrial Revolution took place.
today, the soaring oil prices could become the trigger for us to focus more on other sources of energy. so, the whole thing could be for the better.

If oil does not hit $200 a barrel by years end, it will definitely hit it by mid 2009. Corporate greed will and political corruption will make sure of it.

The US government need to get serious for once. Pass laws that require much higher fuel economy. Get serious about alternative fuels. Open all areas to dirlling (even if the oil companies don’t drill the knowledge that the oil can be used will help the price go down). But mostly, the government has to get off their behinds, stop making it a political issue, and just do something.

Oil will be $250 by Christmas and more if Iran is bombed. People do not realize that after the Olympics we will live in a new world where the suicidal economical growth will be a thing of the past. Dont forget we had growth since 1945 because women came out to work, that was not enough then immigration was encouraged, then that was not enough PC met targets, that was not enough, we gave credit to all. Now we are right at the wall…there no further means for growth.
To perfomr work, there is no alternative to oil. Alternative source such as wind is a hoax. You cannot create energy. Even if one invented a car propulsed by water, the energy to make and distribute that water will be will be more than oil. Even nuclear is soso. 5 years to design, 10 yrs to built for a life of 30 years. Mining, transporting, operating, splitting U235 takes a huge amount of energy considering that 7 people (teachers, police, sercurity, docs, etc) are required to support 1 worker.
My advice: get out of hospitality (tourism) industry and invest in a plot of farming land. We will be free fall big time, say in Spring 2010 when I will write you again.
polo88

The recent poll by CNN listing major concerns covered oil costs, and presumably most would think of transport there, and food.
Many in colder regions must have heating as their biggest concern now winter is approaching.
A poll to show that as a separate issue would be very relevant, and more so as the season advances.

Oil drops, at the moment, by $5. U.S: weekly inventories up by 3m barrels. I said yesterday that these sharp intraday drops are a sign that things are changing. The citizens of the U.S. will and are cutting back on their fuel consumption. That is why I repeat my year end price of oil at circa $100.

To my great relief the Iranians wonderfully demonstrated how much butt they will kick if attacked. Well done Iranians!! This has taken the wind out of the sails of the scamming manipulators of the NYMEX oil futures. Hello oil at $50 per barrel. I will relish the losses made on the NYMEX crude oil futures market by those who were taking food off the plates of the poor of the world.

Todd,

I think as the price goes up people will simply consume less and there will be more left as we can clearly see. I do not think that it would hit $200. The more expensive the oil is, the less people will be driving cars. There are just too many things pulling our pocket at the moment. Also we are all worried about our properties as well.
I think the way forward is to see the positive things and to be more positive mediawise as well. We are talking about people reacting to the news.. it would be good to see some good ones coming our way..
Hopefully the drop in oil would be one soon, fingers crossed.

hi todd

Energy efficiency is the key here. People need to reduce their demand for oil/gas.

See this wonderful Irish company http://www.kingspan.com especially http://www.kingspan-renewables.com

imagine if everybody had solar tubes on their roofs

think of the MASSIVE savings on gas and electric bills !!!!!!

At $200 a barrel I think that a number of macro changes will start taking shape - the nationalisation of airlines will either start, or accelerate as conventional business models cease to be relevant as national carriers face increasing costs that they are unable to pass on in their entirety to consumers.

The development of alternative / unconventional sources of energy will intensify which I think most people will agree will be one of the few positive outcomes, and as focus on energy solutions intensify, so too will discussion and developments around sustainable solutions. Carbon emissions and trading schemes will become more relevant and governments in the developed world will begin legislating cap and trade - or similar - schemes, while the gap with developing nations like China and India will increase as they continue to build high carbon emitting energy solutions, eg coal plants.

$200 barrel oil will intensify geopolitical instability as nations and governments scramble to secure strategic reserves, and sovereign funds in China (and to a lesser extent India) will extend their reach, and grow more powerful through acquisitions in developing nations hungry for Chinese capital.

And Detroit’s Big 3 will go bust as Toyota, Honda and small engined / hybrid cars become the norm. Of course that’s just a small corner of all the implications of a high barrel price, but that’s a start - look forward to alternative views!

I do not want to be the party cooper here but we are forgetting something here. Leaving our cars stand and looking for alternatives for our transportation is not that bad after all. Not only would the environment benefit from the reduction in CO2 dumping, but also congestions on highways and in cities would lessen dramatically.

I dont subscribe to the view that oil will reach $200 by years end. Of course, it could , in the light of the mad speculation going on in the market right now. It doesn’t make any sense to me, the consequences will be devastating to the entire global economy. The outcome can only be imagined than being described.

The current trend in man made, no matter the arguement about demand and supply. Why is it now that it adds up to $10 in one swoop at the sneeze of any little event in the troubled spots of the world like iran and Nigeria? All of a sudden, it will drp back and so forth and so on. I urge the USA congress to have a hearing on the way oil is being traded at the moment. That will soothe the nerves of consumers who are going through so much pain at the moment.

No….prepare for a dollar upswing as the election nears…and a fearful futures crowd. I think we are swinging between $140 and $160 by 1 January…..and will hit $200 only at the end of 2009…..when the election results have worn out.

Whether oil reaches $200 by years end or not is less important to me than punishing those who are responsible for it to begin with. Those who opposed electric cars in the seventies, those who have opposed all forms of alternative enrgy production because of their greed and lust for power. The crimes that led to the current crisis in the banking sector are equal to the crimes commitied in the cause of oil. None of the “fat cats” who are reaping the gains of these crimes will ever come before a court, had their weath and the wealth of their families confiscated or be condemned to a life of work, worry and uncertainity as most of the rest of us live.
The real crisis is not oil, or food or water but the lack of morality in todays business world.

Until a few days ago, it did indeed seem that oil would break through that $ 150 barrier, but the price has suddenly fallen back to around $ 130. Supply & demand, or speculators who have shed some of their greedy optimism in futures? Never mind $ 200 for 159 liters of oil, even the present “bargain” price of $ 130 still hurts the global economy as a whole. My hope is that there will be a steady move away from oil to renewable energy supplies, namely solar, wind, and geothermal sources. It will take time to get there, but a general move in that direction will significantly reduce Western exposure to political instability in regions where most of our collective oil imports come from. Dependency is never a good thing, regardless of the form it takes.

I think oil prices are going to continue to rise for a while, because it is supply and Demand. As the demand is high and the supply is low, you will see an increase at the pump. If the the supply is high and the demand is lower you will see slightly lower prices at the pump. Another problem that still exist is that many americans still are driving around their big SUV’s and getting only about 16- 22 miles per gallon. If they switch to fuel efficient cars that get more than 28 miles per gallon, then you will see some changes in the usage of gas per consumer.
Another thing, the oil companies several years ago brought the patten rights to many of the cars that will benefit our economy in the long run. What we need to do is have some of the major car companies join together and buy these rights, then they can start working on more cars that will maybe someday be solar power. With the solar power car you will not have to use one drop of gas. Here you are using the sun’s energy to power your car. By having better cars it will greatly benefit our economy.

hi

i think governments should ban private cars use. starting by a ban on week ends, then a ban all the time. meanwhile we should stop stupid wars and instead build infrastructure for public transports.

this will do a little but will help on a long term to get adapted to a new reality!

cheers.
vitcochino
hong kong

The world oil companies are certainly doing their bit to reduce the CO2 Emissions. Even though we are all feeling the pressure of the increase, even in Europe, it will be interesting to see what innovative changes would come about should we hit 600USD/barrel. The old electric milk floats from the 80’s could make a comeback but deliver all the groceries? Maybe more people will work from home? Does this mean that we are going to see the profits soar in the Telco sector? Whatever happens, the world will still go round.

George Soros goes ’short’ on oil and long on gold. Anyone out there still think oil will hit $200?

Repeat, $100 by Xmas.

Todd, We are at the point where current energy prices, as a proportion of household income, business costs, airline tickets etc, are forcing re-allocations of resources and stressing the economy. I do not believe in a sustained $200 oil price because at that point household income nett of energy would be unsustainable, and businesses would incur costs they would no longer be able to pass on. Fertiliser prices would be so high as to deter planting of cereals, as they have already done to the Pakistani wheat crop. $150 looks something like a current limit, above which those who can change their habits will, and those who cannot, mainly the poor and poor countries, will suffer.

The price mechanism will operate, but at the cost of a gradual slow-down of global production and demand, tracking energy production rates, and the most vulnerable will suffer the most. If there market pressure for $200 oil, the economy will respond appropriately.

On the bright side, renewables and biofuels will smooth out some bumps, as is already the case.

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I am sure we will be paying $500 USD eventually. However the rest of the world will be paying 125-175 in Euros. When the House of Bush comes to an end and the baby boomers start cashing out, the Saudi family will turn to the Euro and we will wish we had listened to Ron Paul. Our country is infamous for “saving face while loosing ass”.

Todd , I must say that if the status quo remains the same the pressure on the pricing would keep on going up . The only way you could reduce this pressure is either you reduce consumption , find alternate resources or supply points and in my opinion the easiest of all is safeguard supplies . The propotion with which the popultaion is increasing ; the way the developing countries are seeing boom ; the correction is bound to happen .

I unfrotunately predict that $200 a barrel is a reality because the conflict in all the oil rich regions are going to go up . In pursuit of the war against terror which I fully support ; the path taken was wrong. Perhaps we were not patient and went for achieving quick gains like combat . I think we should adopt alternate route like having better intel based initiatives. Like especially in Middle East . The recent overtures by US government seems in the right direction especially towards Iran .

The strategy should be to cool down the tempratures ; the rehotrics are not going to help . But at the same time I do not percieve that it is as easy now . On the basis of the fact that now as this is the election year , the steps