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$200, $400 Oil by end of 2009, and 2010-12, respectively

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In January, Jim Puplava forecast "$125 by Year-end", we hit that this week.

And Jim P. is now revising his forecast to:

 

$140 -150 by winter

$200 Oil by the end of 2009

$??? - if disaster hits: pipelime blows up, etc.

 

"At $200 oil, we will be rationing gasoline."

"What are they going to do

"We are competing now with 3.5 billion people on the other side of the planet."

"Opec is consuming more of the product they produce...there is less to export."

 

/Listen: (near the end): http://www.netcastdaily.com/broadcast/fsn2008-0510-3a.asx

 

== == ==

My Longer term target is ... $400 oil by 2012/3.

 

Look at this chart, multiply by 10

 

30yroilpw8.jpg

 

$13 oil : $130 oil now

$40 oil : $400 oil within 3-5 years, maybe much sooner

 

/see: Oil's Long Cycle

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Lagos pipeline blast 'kills 100'

Thursday, 15 May 2008 18:43 UK

http://news.bbc.co.uk/1/hi/world/africa/7403525.stm

 

 

At least 100 people have been killed in an oil pipeline explosion in Nigeria's commercial capital Lagos, the local Red Cross says.

 

The explosion tore through the Ijegun suburb, engulfing schools and homes after a bulldozer burst the pipeline, reports Reuters news agency.

 

Red Cross officials said many injured people had been taken to hospital and they were still trying to rescue more.

 

Among the dead is a two year old baby, emergency relief workers said.

 

"The fire is still going on, a lot of people are dead. Houses are burned. People are running for their lives," the AFP news agency quoted a Red Cross volunteer as saying.

 

At least 36 people have been taken to a nearby military hospital, National Emergency Management Agency (NEMA) spokesman Abdulsalam Mohammed said.

 

 

 

Nigeria is one of the world's major oil producers and pipelines cut through many residential areas, both in cities such as Lagos and oil-producing areas.

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Outlook for Long Dated Oil - Jim Kingsdale

 

$500 oil in 2015? Am I crazy? Well, I’m not predicting an exact price of oil in 2015, but there is evidence that makes $500 per barrel a possibility. It includes

 

+ The mega-projects work of analyst Chris Skrebowski and others that suggest a drought of new oil fields coming on stream after 2010 and a dramatic fall off in 2014. (Yes I know about Brazil’s Tupi field and it will be wonderful…by 2020.)

 

+ Charlie Maxwell’s prediction that crude oil production will peak around 2012.

 

+ The increasing cost of recovery of new oil projects that are coming on stream, such as oil sands or fields that are miles deep and many miles offshore or the Caspian Sea with its killer winter conditions that have helped to put that project far behind schedule

 

+ The hundreds of millions of poor young people in China, India, the Far and Middle East, Russia, and Mexico who are striving for the economic benefits so common in OECD countries where per capita oil use is many multiples of the global average.

 

What would $500 oil do to stock prices?

It would presage extreme stagflation, the economic scourge of the 1970s. In such a world, stock prices could crash on a 1929 scale. We would probably see rationing in the U.S., economic weakness that would rival or exceed the 30s, possibly military adventurism, and, needless to say, an awful lot of human suffering. The thing to remember is that $500 oil means less oil available to the world and that means less economic activity, a world without growth. We live with the assumption of perpetual growth. So what $500 oil means is a different world.

 

/see: http://seekingalpha.com/article/67250-outl...ing-attractions

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The question then is:

 

'If you (as in everyone reading this) know what is going on with regards to peak oil and the potential monetary 'problems' that our system is facing, what is your plan of action? What do you intend to do about it?'.

 

The girlfriend wants to trade in her Nissan Altima for a Range Rover. I don't have the heart to tell her.....

 

Get carfree. Invest carfree. Talk carfree.

Think creatively about the future. Get ahead of the change.

 

Utter tripe. Britain produces about 2% of the world's oil and uses 2%. The US produces 10% but uses 25%.

 

True. But Britain has moved "into deficit", importing Oil.

And the 15% mismatch in the US is totally appalling, and totally inappropriate.

Those Americans who cannot see that, and act now to do sometime about it, deserve the firestorm

that is headed their way. The drum sound will get louder, until sleeping idiots hear it, and react.

 

Oil demand destruction in the USA is THE story of the next 5 -10 years

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does anyone has any thoughts on when the mass panic will begin regarding rising oil prices? I mean, buying gasoline, food and emptying stores, etc ... at 150? at 160? or 200?

any ideas are appriciated?

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does anyone has any thoughts on when the mass panic will begin regarding rising oil prices? I mean, buying gasoline, food and emptying stores, etc ... at 150? at 160? or 200?

any ideas are appriciated?

I think that if any panic starts it will be caused not by the price, but when many people go to the petrol station and there's no petrol to buy.

 

So if the free market is operating higher prices may prevent actual shortages at the petrol stations. Of course, more and more people will have to cut back their usage and maybe reorganise their living and working practices.

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does anyone has any thoughts on when the mass panic will begin regarding rising oil prices? I mean, buying gasoline, food and emptying stores, etc ... at 150? at 160? or 200?

any ideas are appriciated?

From a newsletter I received today.

 

'The issue is not the fundamentals. What's bullish is the comments from people like Goldman Sachs,' Olivier Jakob, managing director of Petromatrix in Swizterland, was today quoted as saying. [3] 'The market believes that the only thing that will put a lid on oil prices is demand destruction. We will find out how high the price has to go before this happens,' Adam Sieminski, chief energy economist at Deutsche Bank, Washington, added. [4]

 

[3] Source: Bloomberg News (May 21 2008)

[4] Source: Bloomberg News (May 21 2008)

 

So, when do we get demand destruction?

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So, when do we get demand destruction?

 

yeah, thats a good question also, but first we need to hit the top, and the top is likely to be at 160 like Zapata George said.

 

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$133.49 a barrel now.

 

95-octane petrol just reached an average price of €1.50 a litre today in Finland, a significant new record which I've been awaiting for weeks.

 

This from the Telegraph:

Oil price 'contango' may signal market is heading much higher

By Edmund Conway, Economics Editor

Last Updated: 8:36am BST 21/05/2008

 

Investors are betting that oil prices will continue rocketing for years to come, it emerged as the crude price hit a new record high.

 

Opec will not boost output in the coming months

It is feared that Opec will not boost output to rein in prices

 

Long-term oil future prices have jumped at an unprecedented rate in a sign that investors are buying up stocks of oil en-masse almost a decade in advance.

 

The situation is highly unusual, since futures prices are almost always lower than today's oil prices.

http://www.telegraph.co.uk/money/main.jhtm...21/cnoil121.xml

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$133.49 a barrel now.

 

95-octane petrol just reached an average price of €1.50 a litre today in Finland, a significant new record which I've been awaiting for weeks.

What we need to do is look out for anecdotal evidence that people are leaving the car at home, using it less, etc. There will come a point when people will not pay, although many of course may have little choice.

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Being discussed on Carfree Living / Oil Demand Destruction: The Story of Our Time, Stay ahead: Talk carfree. Invest carfree. Get carfree thread.

 

I was thinking of making a separate post, but maybe this belongs here. I work in SW London and I have to say that over the past couple of months it has become eerily quiet on the roads going into work in the morning (I don't actually use the roads, just have to cross them from the tube station). I get in around 10am so miss the main rush hour, but even so it is a lot quieter than when I started working here a couple of years ago. We're just outside the extended congestion zone, so that may have had an effect, but I think that has been in operation a for quite a while now.

 

Has anyone else noticed a reduction in traffic in their city?

 

http://www.greenenergyinvestors.com/index....ic=3197&hl=

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What we need to do is look out for anecdotal evidence that people are leaving the car at home, using it less, etc. There will come a point when people will not pay, although many of course may have little choice.

what? car free?? ufff! no way! thats not going to be soon! They likely to be paying until they could not afford it. Without any understanding on what is going on they likely to complain but keep paying. We could ride up to 160 without any big correction.

Thats what I am worried about timing panic , because when media starts talking about "world peak oil" that will cause a major spike in oil prices, probably to 500 or higher. I saw a today an article (don't remember where, probably CNBC website) , they were predicting 1,000 oil

 

 

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Thats what I am worried about timing panic , because when media starts talking about "world peak oil" that will cause a major spike in oil prices, probably to 500 or higher. I saw a today an article (don't remember where, probably CNBC website) , they were predicting 1,000 oil

 

Give it time, give it time...

 

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From The IC

Why does oil cost so much?

Created: 22 May 2008 Written by: Jonathan Eley

If a numerate alien descended from another planet and did a supply-and-demand based analysis on the oil market, would he/she/it conclude that $135 per barrel is a fair price to pay for this strange black goo that powers our planet's economy? Quite possibly not.

Demand is strong, of course. Western economies are far less energy-intensive than they used to be, which is why $100-plus oil hasn't pushed us into a deep recession (yet). But this is offset by increasing consumption in the developing world; we're all well-versed in the arguments about Chinese abandoning bicycles and buying cars in droves

 

But is demand that strong that prices needed to rise by so much, so quickly? Oil has gone up by 90 per cent since the start of the year, yet many economies are slowing down and there has been no major supply disruption during that time.

 

What may have made the difference is speculation. Financial Times columnist John Authers wrote an interesting piece on this theme earlier this week. He pointed out that investment in indices based on commodity futures (that's all commodities, not just oil) has risen from $13bn five years ago to $260bn now, according to testimony before the US Congress. (Read the full article here).

 

Separately, a piece of research out this week from Greenwich Associates, a US consultancy, concludes that "there is little doubt that, in the immediate-term, speculative investors are driving up both trading volumes and prices". It defines such speculative interest as pension funds looking to diversify, hedge funds looking for 'alpha' (performance over and above benchmarks), and European banks - who are investing in commodities to back funds they are marketing to retail customers. (For more on their conclusions, click )

 

Banks have an unfortunate habit of punting products to retail investors just as the boom in the underlying asset class is ending - think emerging markets in the early 1990s, tech stocks in 2000, and commercial property in 2006/07. Both the Bank of England and the Federal Reserve are warning about a protracted economic slowdown, which will eventually reduce demand for oil and industrial commodities even if China and India are still booming. So think carefully before buying into commodity-based investment products.

 

How much of the depreciation of the dollar is factored into the oil price?

 

I swear..... i have James Dines ringing in my head

 

 

 

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From The IC

How much of the depreciation of the dollar is factored into the oil price?

I swear..... i have James Dines ringing in my head

 

WHy werent these experts better at spotting speculative demand in the property market?

There, it fed an even bigger bubble, which is bursting now

 

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My Longer term target is ... $400 oil by 2012/3.

 

Look at this chart, multiply by 10

 

30yroilpw8.jpg

 

$13 oil : $130 oil now

$40 oil : $400 oil within 3-5 years, maybe much sooner

 

(added to header)

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From the Enegy and Capital Newsletter

 

Memorial Day, 2008: The Tipping Point in the Peak Oil Debate

By Chris Nelder | Wednesday, May 28th, 2008

 

Those of us who have watched for the inevitable arrival of the peak oil crisis have been waiting for years for the day when we no longer had to fight for the acceptance of the idea, and could start getting on with the hard business of what to do about it.

 

And then, just like that, it happened.

 

Like a chorus line turning in unison from left to right, the media and the financial markets turned and embraced the notion of peak oil last week.

 

For convenience, let's call it Memorial Day, 2008.

 

CNBC devoted a whole day to peak oil coverage, allowing some in-depth discussion of the issue possibly for the first time. In the evening, it broadcast a special called "Oil Crisis."

 

Billionaire hedge fund manager and oil man T. Boone Pickens said he saw oil going to $150 this year, and this time, was widely quoted in the financial press. (Check out this excellent interview with him from the Milken Institute Global Conference 2008 in April.) He put the reasons behind rising oil prices plainly:

 

"They've got to go up, because the people that have the oil want it to go up. They're running out of oil. They're going to have to have—85 million barrels a day is all the world can produce. The demand is 87 million. It's that simple. It doesn't have anything to do with the value of the dollar. It's a fact of supply and demand. That's it."

 

While we might politely disagree with the legendary oil investor about the dollar part, in terms of the overall trend being about the fundamentals, he was spot-on. He took a 14 percent loss in the first two months of this year by shorting oil and natural gas, and quickly learned from the error to get long again and back into the black.

 

Goldman Sachs analyst Arjun Murti, the only major investment bank analyst who correctly predicted oil over $100 last year, said that oil could breach $200 this year, and $150 was very likely. Again, this time, Wall Street sat up and took notice instead of laughing.

 

In the last couple of weeks, when I talked about peak oil in my radio and TV appearances, I didn't get shouted down immediately, or dismissed for holding a "controversial theory." Instead, they actually listened to hear what I had to say next.

 

In an interview with CNN radio last week, I think the host was rather shocked when she asked me if recent predictions of $12 gasoline in the next few years could happen.

 

"Easily," I said, "easily." And then explained why peak oil means that prices will have to keep going higher as long as global demand continues higher, because supply appears to be maxed out. Even as demand in the developed world declines due to price-induced demand destruction, the red-hot developing economies of the world are more than making up for it.

 

And you could have heard a pin drop when I explained that "there are no supply side solutions to peak oil" to another radio interviewer last week.

 

The dialogue didn't shift because pundits suddenly understood the importance of flow rates, or because the data on reserve estimates suddenly became clear.

 

It was the price that did it.

 

With oil and gasoline making an almost a unbroken string of record-breaking prices since the start of the year, the problem finally got the attention of the media, and now they are grasping for answers. Reaching the $130 mark was apparently the last straw.

 

There is still much confusion over why oil prices are so high. Some blame speculators, even though the ultimate holder of a futures contract must take delivery of the oil for use in a refinery. Some still point to a "terror premium," even though oil prices have continued straight up as geopolitical events come and go. Others vastly overrate the importance of the declining dollar, or the latest inventory numbers, or pronouncements from OPEC.

 

At least nobody is claiming that oil will go back to $45 a barrel anymore, or that new supply in the next few years will somehow resolve the tension with unflagging global demand. Oil futures have gone back into a contango mode, indicating that fears about supply have gripped the market, prompting the Financial Times to report last week that "peak oil views" are now influencing oil prices.

IEA's Bombshell

 

As the Street grappled with the new reality of oil price, the Wall Street Journal dropped a bombshell that reinforced the supply question decisively. They previewed the International Energy Agency's upcoming report, which won't be out until November, on the world's top 400 oil fields, including their individual depletion rates.

 

The bottom line was a zinger.

 

For the first time, the IEA admitted that the depletion of aging oil wells, combined with the dampening effect of skyrocketing costs on new field development, means that the world will have a hard time reaching 100 million barrels a day of production within the next two decades.

 

Their previous estimate from only last year was 116 mbpd by 2030, which was backed up by similar reports last year from the EIA and the National Petroleum Council.

 

Their projected supply curves are now sharply reduced, while their global demand projections continue to show about a 1.5% annual rate of growth.

 

Fatih Birol, the IEA's chief economist, said: "One of our findings will be that the oil investments required may be much, much higher than what people assume. This is a dangerous situation."

 

For those who understand this data, this was a major, major announcement. It means that the IEA—the official energy data agency of the OECD—has given up on its long track record of ridiculously optimistic projections that supply would always meet the expected demand. They are no longer assuming that any supply gap would be filled by big OPEC producers such as Saudi Arabia, Iran or Kuwait.

 

Perhaps they felt emboldened to leak this preview of their findings because they realize that their credibility is at stake. They have consistently underestimated the challenges of today's oil business in their previous annual outlook reports, and their projections for both supply and price have been way off the mark.

 

The world's remaining undeveloped oil resources will require enormous efforts and capital to produce, including extreme technology, extreme physical challenges, and unprecedented geopolitical risks. Any increases in oil production that the world does manage over the next couple of years aren't going to come easily.

 

Whatever the IEA's reasons, however, the game is up. Most of the world now recognizes that we are up against a bona fide supply limit, and all the market is doing now is trying to find the proper value of a barrel of finite, nonrenewable, and diminishing petroleum.

 

In fact, I'm having my doubts about anything over 90 mbpd. I suspect that in another two or three years, as we reach the end of plateau at the global peak of oil production and start down the other side, the IEA will once again revise its estimates downward to match up with reality.

 

Those of us who have been laboring for years to explain that we really do have a supply problem and that no, drilling ANWR or deepwater Gulf of Mexico won't fix it, should take a brief moment to shout "Hallelujah!"

 

With all the media attention, the game of investing to profit from the peak is most certainly afoot, and we've got some excellent picks in the $20 Trillion portfolio that can produce domestic oil for under $50 a barrel.

 

Hold on, folks. The ride is just about to start getting interesting...

 

Until next time,

 

(NOTE: MY emphasis placed on the term price-induced demand destruction)

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My Longer term target is ... $400 oil by 2012/3.

 

Look at this chart, multiply by 10

 

30yroilpw8.jpg

 

$13 oil : $130 oil now

$40 oil : $400 oil within 3-5 years, maybe much sooner

 

(added to header)

 

Someone#s trying to spoil your prediction :lol:

 

Article posted by Simon English of Evening Standard 30th May.

 

Oil traders in London are to be dragged into a worldwide investigation amid increasing concern among regulators and politicians that the market is rigged.

 

The Financial Services Authority is linking with watchdogs in Europe and the US to probe suggestions that teams of unscrupulous traders are driving oil prices higher, damaging business and hurting consumers.

America's Commodity Futures Trading Commission, until now a low-key regulator, has upped its profile in response to fears that the oil market is spinning out of control.

 

With some analysts predicting prices could rise to $200 a barrel within the next two years, officials are worried that the normal laws of supply and demand have been suspended.

 

The CFTC has taken the unusual step of announcing that an investigation has begun in an attempt to pacify anxious politicians.

 

Bart Chilton, a CFTC commissioner, said: 'It's important that people who are paying high gas [petrol] prices understand the CFTC is on the case and that we're closely monitoring, and in this instance deeply investigating, any potential abuse.'

 

Traders will be ordered to give daily information on positions they have taken in the oil futures market - a field that has tended to fly beneath the radar of financial regulators.

 

The concern is that some investors have taken such heavy positions that they now have a vested interest in keeping prices high by spreading fears that demand for oil is likely to outstrip supply in the near future.

 

The CFTC and the FSA are to analyse data from the New York Mercantile Exchange and the IntercontinentalExchange (ICE), which owns the London exchange, to see if traders are taking positions that exceed normal dealing patterns.

 

ICE chief executive Jeffrey Sprecher concedes he is under pressure to persuade the world that the market is not being manipulated. 'We are in extraordinary times,' he said.

 

The oil price slipped 77 cents to $125.85 a barrel today, but is expected to remain well above $100 for the foreseeable future.

 

In Britain and elsewhere, truck drivers and motorists have been protesting that petrol prices are out of control.

 

The CFTC is understood to have begun its investigation six months ago. It is also demanding traders follow new rules designed to increase the transparency of the energy futures market.

 

Analysts say the probe could help drive oil costs lower, at least in the short term, as traders grow nervous about placing large bets on high prices in case they become the focus of the inquiry.

 

....ends....

 

Looks like people trying to find the brakes, but the pads are worn.

 

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I just thought demand destruction is not going to be soon. This because governments (like China, Mexico, Russia, etc..) still have money to buy oil at 150, 200 or maybe higher and sell it subsidized, it is not their money, it is ours, and they don't care much. So we have to watch when governments will be going bankrupt, and the cost of oil will be transfered directly to the customer, thats when the demand destruction will begin.

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Interesting article.

 

IEA more and more candid on the situation. Can't help thinking that the Russians will do anything they can to stoke the spec flames to maximise revenues though.

 

http://www.ft.com/cms/s/0/23928598-36c1-11...00779fd2ac.html

 

 

Gazprom predicts oil will reach $250

By Carola Hoyos in Deauville and Javier Blas in London

 

Published: June 10 2008 09:00 | Last updated: June 10 2008 13:22

 

 

Russia’s gas monopoly, on Tuesday predicted oil prices would reach $250 a barrel in 2009.

 

The prediction came as the developed world’s energy watchdog warned that record high oil prices were needed to choke off demand in order to balance the oil market.

 

The statement is the International Energy Agency’s most candid admission that oil supply is struggling to catch up with relentless Asian demand for oil and last week’s jump. The price of oil rose $16.24 in less than 36 hours to a record $139.12 a barrel by Friday.Speaking at a strategy presentation in Deauville, Alexey Miller, Gazprom chief executive, said: “Today we witness a very great change for hydrocarbons, the level is very high and we think it [the price of oil] will reach $250 a barrel.”

 

A company spokesman specified that Gazprom believed that level would be hit in 2009.

 

The prediction is substantially higher than those being made by analysts, who see oil prices in 2009 ranging between $100 and $200 a barrel.

 

In its monthly oil market report, the IEA said that “supply growth so far this year has been poor and higher prices are needed to choke off demand to balance the market”. It added: “Abnormally high prices are largely explained by fundamentals”.

 

The market responded by pushing prices back up after they fell below $134 a barrel earlier in the session. The IEA said “supply growth so far this year has been poor and higher prices are needed to choke off demand to balance the market”. Nymex July West Texas Intermediate rose 70 cents to $134.95, while ICE July Brent added 53 cents to $134.38 a barrel.

 

In its report, the IEA cut slightly, as expected, its oil demand growth forecast for the year, but surprised the market with a deep reduction in its non-Opec supply growth forecast, leaving the world economy more dependent than anticipated on Opec, the oil producers’ cartel.

 

“This is a case of supply and demand pulling in opposite directions to push prices higher,” the IEA said. “Global market fundamentals showed continued tightness, with constrained supplies and robust non-OECD demand growth.”

 

It cut its demand growth forecast further by 80,000 barrels a day to an annual increase of 800,000 b/d because of record high prices, the slowdown of the US economy and the partial removal of fuel subsidies in some Asian countries.

 

The agency said that every day there were fresh signs of demand destruction, particularly in sectors such as airlines, but it warned that so far there were “very few signs of slowing demand in non-OECD countries where economic growth is far more significant than price in determining demand”.

 

The reduction is oil demand growth was overshadowed by a larger cut in forecasted supplies. The IEA reduced its forecast for non-Opec supply growth to just 455,000 b/d, or 225,000 b/d below last month’s forecast. It expected most of the non-Opec fresh output to be in the form of biofuels, which would account for 72 per cent of the supply increase. The non-Opec supply growth forecast for 2008 is now below the growth achieved by the group both in 2007 and 2006 in spite of significantly higher oil prices.

 

The smaller-than-expected supply increase from non-Opec countries would reduce the spare capacity available to Opec to below 2m b/d for the first time since the third quarter of 2006. The IEA said that Opec continues to dominate global supply growth, as non-Opec production has languished at or below levels of a year ago for the past three quarters.

 

Opec supplies averaged 32.3m b/d in May, up almost 400,000 b/d from April. Iraqi supply hit a six and a half year high at 2.5 mb/d, the IEA said.

 

The agency warned that the imbalance between demand and supply forced a counter seasonal drop in rich countries oil inventories in April. It estimates that stocks fell in April by 8.1m barrels. This compares to a traditional increase in April of about 30m barrels.

 

The IEA warned that the current oil prices could “impinge upon growth prospects” even though the global economy is more resilient to rising oil prices. “Globally, the high oil price is contributing to inflationary pressures,” it said.

 

The warning from the IEA echoed Monday’s comments by Tony Hayward, chief executive of BP, who said that the oil market was not well supplied. “In a well functioning market where supply and demand are balanced, prices should be stable. Where prices are high, however, they show that supply is not responding adequately to rising demand ... and that is where we find ourselves today,” Mr Hayward said.

 

Francisco Blanch, head of commodities research at Merrill Lynch, said on Tuesday he was raising his forecast for West Texas Intermediate crude oil in the second half of the year to $121.5 a barrel on “a combination of lower than expected supplies and unrestricted demand. Non-OPEC output is really struggling to expand”.

 

Gazprom is said to have its sights on investing in TNK-BP. But Alexander Mededev, director general of Gazprom Export, said the company would consider any interest in TNK-BP only after the internal conflict between the company’s parent shareholders was resolved.

 

However, Gazprom has ambitions to increase by 2012 its share of oil to 15 per cent of its entire production, which is currenlty largely natural gas.

 

The company expects to invest $30bn this year and expects to have a market capitalisation of $1,000bn within seven to 10 years.

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Does anyone believe we will get more chances to enter the oil market at below $130 prices? I'm looking at today's fall and wondering whether to jump in on the long side?

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Does anyone believe we will get more chances to enter the oil market at below $130 prices? I'm looking at today's fall and wondering whether to jump in on the long side?

 

I'm faced with the same dilema, my buy in target was $110 when it started to correct last time and now I'm thinking perhaps I should have jumped aboard at $122. ;)

 

My fears were that the CFTC would intervene as a result of their investigation into allegations that speculators were responsible for the higher prices. Inventories are n't going up so I've ruled this out as just another Fed/Gov machination to blame anything or anyone for their monetary expansion excesses.

 

My other fear which I'm not so clear about is that the countries which subside their oil prices may reduce these subsidies significantly enough to quell demand and bring down prices.

 

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I'm faced with the same dilema, my buy in target was $110 when it started to correct last time and now I'm thinking perhaps I should have jumped aboard at $122. ;)

 

My fears were that the CFTC would intervene as a result of their investigation into allegations that speculators were responsible for the higher prices. Inventories are n't going up so I've ruled this out as just another Fed/Gov machination to blame anything or anyone for their monetary expansion excesses.

 

My other fear which I'm not so clear about is that the countries which subside their oil prices may reduce these subsidies significantly enough to quell demand and bring down prices.

I sympathise. I was waiting for a pull back to circa $108 when the damn thing took off, and I've been burnt chasing market rallies before ! And yes, I also was then kicking myself for not getting in on the pull back to $122.

 

I do think capital restraint mchanisms will become more and more apparent as the authorities get more and more desparate to appear to be doing something, so I still can't rule out restrictions on the US market. In fact, its such a stupid thing to do from the US perspective (the death knell for $ based oil markets) that I almosst expect it.

 

Reductions in subsidies though I think won't damage demand that much. I appreciate the standard of living in the countries in question is lower than say US/UK standards but all the same costs in places like Malaysia are very low anyway I believe and there are few alternatives to using oil as fuel as growth accelarates.

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