I was hoping for a draw down to at least 110 dollars on the oil prices, but once again my personal predictions were wrong. Looks like 140 dollars per barrel on Monday June 7th, and some say 200 per barrel by august of 2008. I am still personally convinced that 40% of this price is speculation based and should collapse. Even the highest growth estimates place global supply growth at around 4%, and the price now does not reflect this.
There is a CFTC investigation into the oil markets (link) about the possibility of price manipulation. There is some irony to this as OPEC’s existence is for price manipulation, so what they are trying to say in this inquiry I do not know…. I think the question is a stab at why there are supply issues surfacing, and why the price is skyrocketing for crude.
One bit of irony on the supply side that has surfaced is that Canadais putting new restrictions on sand tar oil recovery (link). Canada lists almost 80% of their reserve numbers on their sand tar fields. People are now realizing that sand tar recovery is basically strip mining, and to recover what they state as reserves will involve removing most of the surface of western Canada.
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