Oil prices will fall, but not by much, analyst says

[Algorem]

http://blog.cleveland.com/business/2008/03/oil_prices_will_fall_but_not_b.html

Posted by John Funk March 14, 2008 20:15PM
Categories: Energy
Henry Groppe

• See Groppe's presentation (pdf)

Columbus - Today's inflated oil prices should be gone within a few months, veteran analyst Henry Groppe told Ohio's oil and gas producers today.

But they are not likely to fall back to any level that will make U.S. motorists very happy. The average price of oil will settle to between $70 and $100 a barrel, he said.

The problem is that global oil production from conventional sources has already peaked or will peak this year, Groppe told about 650 people attending the annual conference of the Ohio Oil and Gas Association. In other words, total global production won't get much higher.

In other words, the old pattern of price spikes and collapse are gone. That's good news for producers but a tough reality lesson for consumers, who may have to learn to live with $3 gasoline...

[dkf]

1. Oil is going up because of the weak dollar.

[liberal N proud]

2. Oil prices will fall but you can bet the gas prices will not fall accordingly

They may ease some but will never fall the same rate they came up.

[Strelnikov_]

3. But . . but . . it's the value of the dollar . .

Really?



http://worthwhile.typepad.com/worthwhile_canadian_initi/2007/10/recent-oil-pric.html
http://www.econbrowser.com/archives/2007/10/does_dollar_wea_1.html

OK. But . . but . . it's speculators . .

Really?

http://www.marketwatch.com/news/story/goldman-sachs-raises-possibility-200/story.aspx?guid=%7B4B702F7F%2D41F8%2D45F0%2DA133%2D630F12F2C764%7D&dist=TNMostRead

"As the lack of supply growth and price-insulated non-OECD demand suggest a future rebound in U.S. gross domestic product growth or a major oil supply disruption could lead to $150-$200 a barrel oil prices," Goldman said. Goldman also reiterated its view that oil prices could fall as normal market conditions return over the next four years. "The core of our 'super-spike' view is that oil prices will keep rising until demand declines globally on a multiyear basis, resulting in the return of excess capacity and a lower cost structure," Goldman's analysts said. "Given this view, once excess capacity returns, we think prices can move sharply lower."

Lot of supply talk from Goldman-Sachs there.


Also, anyone wonder why speculators would be running to a market where any day KSA can open their spigot and put an additional 4 M bbl/dy (as I have been told here on the DU) into the market? Or, maybe, just maybe, the speculators have figured out there is no more supply (rate), and little possibility of a decrease in consumption over the near term.

[jpak]

4. My brother paid $3.89 a gallon for heating oil this week in Maine

and the oil companies are refusing deliveries less than 100 gallons (and 100 gallons doesn't last long in cold weather).

maximum suckage...