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Originally Posted by warlock5
What do you think about when Steve Forbes said that in the short term that the price per barrel will drop dramaticaly?
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I gather you mean this...
http://www.forbes.com/business/feeds...fx2195813.html
"Oil price bubble about to burst, says business guru Forbes
SYDNEY (AFX) - Oil prices are set to crash from this week's record highs as a speculative market bubble bursts with an impact that could make the hi-tech bust of 2000 'look like a picnic', business publisher Steve Forbes has predicted.
Forbes said the high oil prices currently dampening the US economy, which peaked at more than 70 usd a barrel yesterday as Hurricane Katrina headed for the US Gulf Coast, would fall to 30-35 usd a barrel within a year.
'I'll make a bold prediction... in 12 months, you're going to see oil down to 35-40 usd a barrel,' he said, according to Agence France-Presse."
He may be a billionaire but he is living in the world of inexhaustable supplies. Traditionally the stock markets always say that supply and demand rule everything. And true, they are almost always right. If the price of something gets too high people buy something else instead. Or they just stop buying it and the price drops.
But, in the case of oil there are 6 billion people in the world and they all need feeding. Only oil provides the fertilsers and pesticides and the energy for sowing and reaping, and processing and cooking and transporting. People will not go hungry just to bring the price of oil down. They will pay all they can afford. And by people I mean companies and countries too.
Because there has been no alternative to oil put in place (We should have started with renewables on a massive scale in the 70s), we are now slaves to oil.
Yes there will be corrections to the price of oil. But in tghe range of 5-15 years it will reach prices that will astound everyone - even Steve Forbes.
I also found this quote from him at...
http://www.forbes.com/finance/free_f.../1003/027.html :
"President Bush could help to once and for all pop the oil-price bubble by selling oil from the Strategic Petroleum Reserve on a more regular basis. Before the devastation wrought by Hurricane Katrina, speculators knew that Uncle Sam was a buyer of last resort. There is no fundamental reason that petroleum prices should be almost three times the level they were three years ago. "
I believe this short term measure *would* substantially reduce gas prices at the pump. But it would deprive the US of essential strategic reserves. And once gone gas prices would rocket higher than ever.
In my opinion Forbes just hates the high price of oil and will talk against it any way he can - I think he's just blustering.