A guess on the price of Oil

[Stephen1151]

I beleive most of us bought in Alberta because of the price of Oil in relation to the jobs that it would create for the towns that we have invested in. I also believe that the reason oil has dropped so low in price is due to investors fear that oil will not be in much demand in the years ahead. I cant help but think that fear in the news headlines may add to this notion causing a self fulfilling prophecy not only that but "Experts" say that a Great depression will hit the economy every 80 years. We may be optimistic that oil will go up again in price, and I hope it does sooner than later but my question is both 2 fold.

Does this really happen every 80 years?
and how long does rein members beleive it will take for Oil to go up again in price.

BTW here is a graph of what oil has done since 1920 http://www.oilnergy.com/1onymex.htm#since20

 

[chargerharry]

Hey Stephen
Here is a clip from 60 minutes on the disconnect between the price of oil and the demand. Several prominent traders discuss the flocking of large investors to the futures floor to beat up the price.
http://www.cbsnews.com/sections/60minutes/main3415.shtml

I don`t know about the 80 year cycle. I am just getting into HS Dents` latest book explaining this subject but the 4 year cycle is easily discernable and I would argue that it is more like a 5 year cycle. 1989 crash, 1999 tech bubble, 2004 Enron, and now 2008. This is the big lie that the stock and fund salesman try to sell you on. They assume that they can get 12% returns so you should double your money in 6 years or so. But if they lose 1/3 to 1/2 of it every 4-5 years, where are you really at? Yes, as a matter of fact, I am bitter.

As for where oil is going, I can`t believe that it will fall out of our lives anytime soon. Just look around your room right now and I challenge you to find anything that hasn`t been made using an oil based raw material, in a factory that hasn`t been powered or heated by a petro resource or transported by a vehicle that didn`t use diesel, Jet A or bunker oil. Compare that to gold which is touted as the safe alternative in uncertain times.

I don`t think anyone can predict where oil is going from here or when. The chart you supplied would certainly suggest that the latest runup was unsustainable. There are many suppliers of energy right now that don`t think much of this low price and will start turning off the taps until prices get into a reasonable range. And then the hedge traders will start working the system all over again. Well, at least someone is making money in these tough times.
Harry

 

[gwasser]

[quote name=`chargerharry` date=`Jan 15 2009, 09:08 AM` post=`48074`]
Hey Stephen
Here is a clip from 60 minutes on the disconnect between the price of oil and the demand. Several prominent traders discuss the flocking of large investors to the futures floor to beat up the price.
http://www.cbsnews.com/sections/60minutes/main3415.shtml


That was a great video link. Thanks Harry

 

[Stephen1151]

Thanks chargerharry...I appreciate your response. That 60 min video is unreal!! thank you for posting that. It seems to me not only investors but media as well bought into the hype of oil as an investment. The real demand for oil was the investor demand for oil futures not the demand for oil itself....wow!