Interesting comments on Oil
An older article from back in May on Naked Capitalism points to the words of John Dizard of the Financial Times who has interesting remarks overall regarding oil prices.
Eugen Weinberg, a commodities specialist with Commerzbank, who thinks we are in the late stages of a bubble, says: "At the moment we have big inventories worldwide, about 3.5bn barrels in the OECD countries, which does not include China. That is enough so that if Saudi Arabia stopped exporting, the world could run at its present level of demand for a year and a half with no increases in production from other countries."
This led me to look into other remarks by Mr. Weinburg out of interest, such as this Reuters article from June 11th.
Oil should come back down to under $100 in 2009 but the days of $40 or $50 a barrel are long gone, senior commodity analyst Eugen Weinberg told journalists in Frankfurt.
"I think we are seeing an exaggeration in markets right now and the peak can possibly be reached in the next three months," Weinberg said, estimating a peak price of around $150-$170.
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"The trigger for this extremely fast-growing bubble is above all the poor performance of other investment classes, like stocks, bonds and property," Weinberg said, with investors turning to oil for returns.
By contrast, the chief executive of the world's largest energy company, Alexey Miller, the head of the Kremlin-owned gas giant Gazprom, predicts Oil is set to reach $150 a barrel in this Belfast Telegraph article.
In a speech to the European Business Congress in Deauville, France, Mr Miller offered little prospect of relief. He warned that the world was experiencing a fundamental shift in energy prices that will end at a "radically new level. We expect that the oil price will approach $250 per barrel in the foreseeable future".
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Mr Miller's prediction is well beyond even the most heady market forecasts, the most extreme of which fall between $150 and $200 per barrel, and was explained only by vague references to demand from the developing world. It nonetheless stoked an already febrile atmosphere of growing public anger across Europe over a soaring fuel cost that is wreaking havoc at nearly every level of the economy.
That's interesting considering we just noted that some believe high commodity prices will cause demand in the developing world to sink.
Mr Miller placed some of the blame on financial speculators for oil's price rise – it has more than doubled in the past year – but said that the primary reason is simple supply and demand, driven by the rapidly expanding countries of the developing world, principally China and India.
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