Reply to: Oil at $120 a barrel

[TimberWolf]

If I still had my old beloved Mondeo, a full tank of diesel would be worth more than the car.

[DimPrawn]

Thankfully for us in the UK, the cost of petrol is almost all duty and VAT, so even if the price of oil doubled, the price of fuel at the pumps will hardly rise.

Well done that government!

[Mich the Tester]

I reckon we'll see $150 dollars a barrel this year, next year is a global crash.

I was awoken by the unpleasant sight of Bloomberg TV in my hotel this morning. In between the bars of numbers flying past the screen at varying speeds there was an American woman with a plastic face saying she believes oil will hit $220 this year.

I switched over to German TV and watched Pingu instead.

[AtW]

Look, it's like this:

Nature has a certain order. It's a bug-eat-bug world out there. One of those Circle of Life kind of things. Now let me tell you how things are supposed to work: The sun grows the food, the ants pick the food, the grasshoppers eat the food...

[DimPrawn]

All this hot off the press money go into commodities bubble, can't blame bankers really - why invest into local businesses that can't compete with China and will give 5-10% dividends at best when you can buy oil, gold, wheat and make far more without much thinking?

Yep. A bankers job is to make as much money (profit) as possible and get the biggest bonus possible.

You could lend to some dodgy business likely to fold in 2 years time, little reward, high risk, or you could buy up futures contracts on every single drop of oil, or food produced, and own the market and name your price.

Boomed! Everyones a winner!

[AtW]

All this hot off the press money go into commodities bubble, can't blame bankers really - why invest into local businesses that can't compete with China and will give 5-10% dividends at best when you can buy oil, gold, wheat and make far more without much thinking?

[DimPrawn]

Hit $119 dollars a barrel this morning.

Should keep the chavs off the road. Only public sector workers with their inflation linked pay rises and pensions will afford to drive (or eat for that matter) soon.

[thunderlizard]

Most oil analysts I know say that oil prices are much more sensitive to politics than they rationally ought to be, but it's the herd mentality and everybody just has to get used to it.

[OwlHoot]

Luxury...

Oil May Surge to $220

Crikey! At that price it will cost about £200 to fill my Jag

Maybe there's something to be said for those 80 MPG bubble cars after all.

AtW will love this bit:

Nomura said the $220 prediction may be an underestimate, as speculative investors trading crude oil who were not active in the early 1990s may amplify the price gain in the event of an export halt.

[BlasterBates]

$150

Luxury...

Oil May Surge to $220

[Paddy]

You are making the classic mistake of just considering supply and demand and ignoring the trillions (yes trillions) of dollars of cheap money lent to investment banks at close to zero interest rates which is now in the hands of the biggest commodity speculators the world has ever seen.

I agree with your point

http://maxkeiser.com/2010/11/20/on-t...il-production/

[TimberWolf]

Tipping point?

Oil worries me. Specifically that demand grows exponentially and supply remains firmly finite and that we are hooked on it. At some stage this sucker is going to go unexpectedly bang.

[DimPrawn]

The recession has hit the oil rich countries, and apart from Russia they are extracting oil below maximum capacity. Production will rise and prices will drop.

You are making the classic mistake of just considering supply and demand and ignoring the trillions (yes trillions) of dollars of cheap money lent to investment banks at close to zero interest rates which is now in the hands of the biggest commodity speculators the world has ever seen.

[Paddy]

I reckon we'll see $150 dollars a barrel this year, next year is a global crash.

Followed swiftly by money printing ($, Euros, £) and then it's Groundhog Day, mega-bailouts, humungous bankers bonuses and house prices in London doubling again.

The recession has hit the oil rich countries, and apart from Russia they are extracting oil below maximum capacity. Production will rise and prices will drop.

[DimPrawn]

I reckon we'll see $150 dollars a barrel this year, next year is a global crash.

Followed swiftly by money printing ($, Euros, £) and then it's Groundhog Day, mega-bailouts, humungous bankers bonuses and house prices in London doubling again.