My Bet on Crude: $150 per barrel
With the worlds population at 6.6 billion people, and the U.S. at 302 million (that’s 4.5% of the worlds population), and with the United States consumers guzzling roughly 14% (13 million barrels a day) of the worlds energy resources, is it any wonder that the U.S. must learn to conserve energy?
The daily supply produced is approx 85 millioin barrels per day (Source: Energy Information Administration of the U.S. Dept of Energy), and demand is at 87 million barrels per day. The laws of basic economics says that the prices MUST go higher.
Even if the U.S. economy experiences a slow down, it is unlikely that the economies of China and India are going to slow to the point where demand will be exceeded by the supply anytime soon.
Add on top of this, the weak dollar -(down over 30% in the last 2 years against other major currencies), what Saudi Oil Producer wants to take payment for his oil in U.S. dollars? I don’t know how you say it in Farsi, but in essence I can hear the guy saying…
Well… OK if I must, but to make up for the losses in holding this green currency that is getting weaker by the month, I am going to boost the price a bit just to make sure the infidel doesn’t get the best of the deal.
Its just business after all. Who wants to take a loss on holding a currency that is always going lower? Certianly not Shiek Bin Barrel.
My bet… is that Oil within the next 6 months settles nicely above $150 per barrel and then headlines start talking about $200 per barrel.
Can you spell $8 per gallon for gasoline?
Walter Schubert, a third generation member of the New York Stock Exchange is the Founder and CEO of GFN.com: The Gay Financial Network.