Rodgers:Oil going to $200

For all sorts of reasons (price, global warming, scarcity, middle east etc.) its really way past time to speed away from our use of oil to VIGOROUSLY pursue alternative technologies.

Jim Rogers: Oil 'Will Probably' Soar to Record $200 a Barrel
Friday, 21 Jan 2011 09:59 AM Article Font Size
By Forrest Jones

Oil prices could hit a record $200 a barrel on rising demand and dwindling supplies, says investor guru Jim Rogers, who predicted the start of the global commodities rally in 1999.

"Known reserves of oil are declining. It is not good news. Unless somebody discovers a lot of oil very quickly, prices are going to go much higher over the next decade," Rogers tells the BBC.

"The price of oil is going to make new highs. It will go over $150 a barrel. It will probably go over $200 a barrel."

Benchmark oil for March delivery lost $2.22 to settle at $89.59 a barrel Thursday on the New York Mercantile Exchange. Thursday in London, Brent crude declined $1.58 to settle at $96.58 a barrel on the ICE futures exchange. Oil hit a record peak of $145 in July 2008.

While the world demands more and more oil, the problem lies in either discovering more or drilling in places where fresh fields may be waiting.

Discoveries off Brazil are promising but won't meet global demand while oil in the Arctic will be very hard to extract, Rogers says.

"Maybe there is a lot of oil in the world, but if there is, we don't know where it is or how to get to it," he says.

Rogers isn’t the only one to warn of surging oil prices.

Joe Petrowski, chief executive of Gulf Oil and the Cumberland Gulf Group, recently told CNBC that crude oil’s price could soar to nearly $150 a barrel by summer.

"If we’re not producing it domestically, because we’re trying to achieve administratively what we don’t seem to want to pass legislatively, and our imports are going down and demand’s up, it sets the stages," he told CNBC.

“I think we'll be at $100 in the first quarter," he added, "and there’s one-in-four chance we’ll take out the $147 highs before Memorial Day.”

Economist Marc Faber has said energy-sector commodities like natural gas and oil are going to rise in price, and will sweeten as investment opportunities even further as the global economy improves.

Emerging-market countries like China and India will continue to demand more commodities to feed their growing economies.

Should the world slip into another slew of recessions, geo-political tensions would arise resulting in oil-supply cuts, says Faber, publisher of The Gloom, Boom and Doom report.

Either way, prices rise.

"The demand for oil will go up and drive up prices," says Faber, according to CNBC.

Should prices reach $100, analysts say, it will be a lot tougher on consumers than when prices reached similar levels in 2008 and gasoline prices broke $4 a gallon.

"The economy wasn't what it is today. People didn't have as much trouble filling their huge SUV trucks," Daniel O'Connell, vice president of energy products at the brokerage firm MF Global, tells ABC News.

"If you see crude spike over $100, it will be very destructive for any recovery that we may be having."



Read more: Jim Rogers: Oil 'Will Probably' Soar to Record $200 a Barrel

Here is another post concerning Rodgers prediction of high oil prices.

Oil has been steadily on the rise since the beginning of 2009. But could it reach mid-2008 levels or climb higher still?

Jim Rogers, an American investor who co-founded the Quantum Fund with George Soros, told the BBC’s Justin Rowlatt on Wednesday the prices are certain to exceed those levels.

“Well, the surprise is going to be how high the price of oil stays and how high it goes, because Justin [Rowlatt] we have had no major elephant [field] oil discoveries in over 40 years,” Rogers said. “The International Energy Agency is going around the world pleading with people to listen. Known reserves of oil are declining. It is not good news. Unless somebody discovers a lot of oil very quickly, prices are going to go much higher over the next decade.”

How high will it go? Oil is currently trading at about $90 a barrel, and according to Rogers the price could double and then some.

“Justin, the price of oil is going to make new highs,” Rogers said. “It will go over $150 a barrel. It will probably go over $200 a barrel.”

Watch:




Rogers warned the world is running out of reserves, which makes things problematic. And even if you take into consideration the recently discovered reserves, getting to them and them being sufficient to meet demand still aren’t a cure-all.

“Justin, those reserves off the coast of Brazil are wonderful if you own them, but even the wildest and most optimistic estimates would only add one year’s reserves to the world,” he said. “The world is using 86 million barrels of oil every day, Justin. Even if it stays static or goes down a little bit, those finds off Brazil will make somebody rich, but they are not going to solve the world’s problems. And, if you know of a lot of oil in the Arctic, please tell us where it is, but it is going to be very difficult to get it out of there.”



Read more: http://dailycaller.com/2011/01/20/oi...#ixzz1Bn6SCWPN

Thanks for the investment advice! I'll be looking for an energy ETF tomorrow.

Many predict $5.00 gas. One aspect the author doesn't address is inflation. Oil is bought in sold in inflated US dollars.

Are you excited to watch Obama's State of the Union address? I think he's going to disappoint many dem's.

I wouldnt exactly say Im EXCITED to watch the State of the Union, but i do expect him to call for prudent cuts in the deficit at the same time he proposes spending in infrastructure, education, and energy. Seems exactly correct to me, but of course the Republicans will oppose any spending even if its essential to the competetiveness of America. Politics trumps rationality in other words.
I will certainly be interested to see if there are any surprise proposals in his speech.

i quess you should check to see if Rodgers address inflation in any of his other postings. i would be curious as well.

Well it looks the price of oil might be going down before it heads up. :)


Oil extends fall as Saudis hint at raising supply
Oil extends losses to below $87 a barrel in Europe as Saudis hint at raising supplies


Pablo Gorondi, Associated Press, On Tuesday January 25, 2011, 8:16 am
Oil prices fell below $87 a barrel Tuesday, extending losses after the Saudi oil minister hinted the world's biggest producer may increase supplies to put the brakes on higher oil prices.

By early afternoon in Europe, benchmark crude for March delivery was down $1.22 to $86.65 a barrel in electronic trading on the New York Mercantile Exchange. The contract lost $1.24 to settle at $87.87 a barrel on Monday

The price of oil has fallen more than 3 percent since Thursday, when it was close to $92 a barrel.

Saudi Oil Minister Ali Naimi said Monday he expected world oil demand will increase this year to between 1.5 million and 1.8 million barrels per day. That's higher than forecasts from the Energy Information Administration and the International Energy Agency.

Michael Lynch, president of Strategic Energy & Economic Research, said al-Naimi's comments imply that he thinks oil prices are too high, and the Organization of Petroleum Exporting Countries would take steps to bring them down.

"I think that's the first serious comment along those lines from anybody in OPEC," Lynch said. "He seems to be saying maybe the market needs more oil."

Slumping stock exchanges in Europe also dented oil prices after fresh data showed that Britain's economy contracted by half a percent in the last three months of 2010. Markets had been expecting the country's economy to continue its recovery.

Forecasts that U.S. crude supplies have risen also helped ease prices.

The American Petroleum Institute will release its report on oil stocks later Tuesday, while the report from the Energy Department's Energy Information Administration -- the market benchmark -- will be out on Wednesday.

Data for the week ending Jan. 21 is expected to show builds of 1.7 million barrels in crude oil stocks and of 2.1 million barrels in gasoline stocks, according to a survey of analysts by Platts, the energy information arm of McGraw-Hill Cos.

In other Nymex trading in February contracts, heating oil fell 3.45 cents to $2.5848 a gallon and gasoline shed 3.61 cents to $2.3771 a gallon. Natural gas lost 5.9 cents to $4.521 per 1,000 cubic feet.

In London, Brent crude was down $1.60 at $95.01 a barrel on the ICE futures exchange.

You beat me to it. I was just looking at DBO and / or DBE. Although the experts don't advise on timing the market, clearly both oil and gold are going down "now". I just can't get into something that I know is decreasing. The long term picture still has it going up, but I'll wait a couple days. China is growing, and consuming. I pulled out this old presentation from May 2008 yesterday. The presentation was made to explain the increasing petrochemical prices at the time. One of the slide compared populations of US, India and China and their respectives GDP. Below is the table.

Population Per Capita GDP in 2005 $*
USA 300,000,000 41,399
China 1,300,000,000 7,198
India 1,100,000,000 3,320

Imagine what happens when China and India begin to produce (and consume) at a level near ours? Imagine the majority of households with washers, dryers, dishwashers, garbage disposals, refrigerators, ovens, TV's........? Are there enough resources in the world to make all these goods? (that's really a rhetorical question).

Anyway

Consumption seems certain to overtake production especially with the future growth in China and India. Over the long term we have no choice but to move to alternative energies. The sooner the better.

Quote:

---

Originally Posted by Havakasha

Consumption seems certain to overtake production especially with the future growth in China and India. Over the long term we have no choice but to move to alternative energies. The sooner the better.

---

Energy is one thing, materials is another. One thing is for sure, China and India appear to have a decent amount of human resources. In a Von Mises context, the supply of human resources far outweighs the demand; hence low wages. I see this happening at my company. Higher paid long term employees are being let go for desparate people who will gladly accept lower wages. Did Atypical mention something about our corporate overlords caring for us??

From what i have been reading Chinese wages are headed upward.