Maybe oil will drop in price

There is a new article in Foreign Policy magazine, suggesting that oil is about $40 too high in price. The consultant quoted believes that speculation has pushed the price far higher than the market justifies and demand is falling. A big price drop would be nice. Look at Figure 35 in the linked article. The projection for the “high oil price” scenario does not reach $100 by 2030. This looks impressive. Maybe the speculators were gambling on a US loss in Iraq with resultant chaos. Time will tell whose is right.

2 Responses to “Maybe oil will drop in price”

  1. Dana says:

    I heard several pundits say that the price of oil needs to be ‘talked down’ and that is not happening due to the too-close frienship with the Saudis…(and the oil cos.) I don’t know enough about it to comment other than someone is getting mighty rich and we the people are getting skimmed.

    Apologies for the segueway but did you see this article in the WaPo re Lincoln possibly having cancer at the time of death? In part:

    “He also suspects Lincoln was dying of cancer at the time he was assassinated, and was unlikely to have survived a year. He thinks cancer — an inevitable element of MEN 2B — killed at least one of Lincoln’s four sons, three of whom died before reaching age 20.” And later mentions that perhaps his mother passed on MEN 2B to him…

    Your thoughts?

    http://www.washingtonpost.com/wp-dyn/content/article/2007/11/25/AR2007112501224.html?hpid=moreheadlines

  2. allan says:

    The price of oil…in dollars, euros, gold, yen, loonies? The best you can say about the price of oil, or anything really, is that it changes. Especially when some idiots try to freeze it, lower it, or raise it by decree. Like trying to compress a water balloon with your fingers. Gonna leak out somewhere your fingers ain’t. There are plenty of reasons one can continually throw into any price conversation, yet over a week, a month, a year, a decade, they wax and wane without ceasing. If someone pointed a pistol my way and said name three right now…I’d say the current price of oil reflects the decline of the US$, the political uncertainties regarding many of the oil regions, and escalating demand from the Asians. A fourth bonus point would be the tremendous credit expansion since 2002 (give or take) which has dumped incessant cash and cash derivatives into the global money flows. But which I see as more a fertile backdrop than direct stimulation.