Remember when everyone was discussing whether the price of oil would rise above $65 a barrel? Yours truly surely does. Currently, it’s at around $96 a barrel and poised to top $100.
A few years ago, I posted on this issue at Jakeneck and was met with a certain amount of consternation and denial. Harking back to these older posts is in no way meant as an “I told you so” or anything like that. It’s just interesting to me that it was right in front of our eyes and so many just didn’t want to see it. The peak oil issue is a matter of historical record in my opinion, nothing more. This post really sums up the issue at the time, a mere two years ago:
From Jakeneck – July 2005
High price of oil due to “structural issue”
That’s shorthand for “it’s getting harder to pump it at the current price.”
Of course, the Iraq War doesn’t help matters at all.
Nor does the current state of the Saudi kingdom help.
And, the Iranian nuclear situation is cause for concern as well. Some good background information on the Iran political and economic scenario is here and here. (You’ll need a subscription to read the entire article.)
During the late spring of last year, a similar item was posted here on Jakeneck, and a long discussion ensued as to whether oil would actually break the $50 a barrel mark. I was claiming it would and go much beyond it, and others were convinced it would not. I remember spending a good amount of time explaining the issue and peak oil and the war, to little or no real progress. People want to believe what they want to believe, and the facts are not important.
So, here we are and oil is at $65 a barrel, and the murmuring around the oil sites is “how high will it go?”
It’s not rocket surgery… I’m simply not that smart. But, I do like puzzles.
Update: Price hits $67 a barrel and…
Boone Pickens, the Dallas hedge fund manager and former oil company executive, said oil will reach $75 a barrel in the next 12 months. Pickens, who correctly predicted in October that oil would reach $60 a barrel, spoke on the NBC Nightly News yesterday. He oversees more than $2.5 billion in energy commodity and stock investments.
Here’s the latest from Boone Pickens.