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Ziad's review
Investment Sector: Commodities Submitted by Ziad 
, President & CEO
at Blackhawk Partners, Inc
4 months ago Tags: economy Oil Add Tag |
About Oil prices and the Economy Today
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Morning folks
Hope you all had a great 4th of July celebration
Coming to the serious stuff, I personally think the price of crude oil to continue to climb — reaching upwards of $200 per barrel — and for prices at the pump to reach $5.75 per gallon within the next two years, if not higher .
With the growth of crude oil supply “constrained,” prices inevitably will rise further as I am afraid spare capacity throughout the energy complex seems very limited, whether for OPEC crude oil, natural gas, or refining.
It is a fact that in all of those areas, capacity is limited. And it’s getting very difficult for companies and countries to boost supplies — something that has become increasingly apparent to us over the first half of this decade.
Add to the fact that the oil industries in some oil-producing countries, like Mexico, are in decline, and other sources of oil, like the North Sea, are now “mature.”
There are other problems as well.
The places that have large quantities of recoverable oil, notably Saudi Arabia, Iraq, Iran, Venezuela, and Russia, aren’t on track to grow their supply aggressively. It’s growing at a very moderate rate.
What’s more, the currently high prices of gas are creating economic disincentives for those countries to spend more money to expand capacity.
I strongly believe the price of oil and gasoline will continue to grow until we see either greater supply growth, which is unlikely, or demand reduction on a global basis.
This trend will obviously plunge the economy into a deeper recession and will get much worse — but this doesn’t mean that there won’t be fabulous opportunities in the crisis; like the subprime mortgage business.
Everything connected with construction and with consumer, I see weakness, and if anything, it’s accentuating a little bit.
In my adult lifetime, up until the last year or two, there’s been a huge amount of excess supply available. We don’t have excess capacity in the world anymore, and that’s why you’re seeing these oil prices.
Anf if you factor in a war with Iran (more of a likely scenario today) before the US Presidential elections, then the sky is the limit.
What do you think?
Your feedback is always appreciated
Thanks much for your consideration
Hope you all had a great 4th of July celebration
Coming to the serious stuff, I personally think the price of crude oil to continue to climb — reaching upwards of $200 per barrel — and for prices at the pump to reach $5.75 per gallon within the next two years, if not higher .
With the growth of crude oil supply “constrained,” prices inevitably will rise further as I am afraid spare capacity throughout the energy complex seems very limited, whether for OPEC crude oil, natural gas, or refining.
It is a fact that in all of those areas, capacity is limited. And it’s getting very difficult for companies and countries to boost supplies — something that has become increasingly apparent to us over the first half of this decade.
Add to the fact that the oil industries in some oil-producing countries, like Mexico, are in decline, and other sources of oil, like the North Sea, are now “mature.”
There are other problems as well.
The places that have large quantities of recoverable oil, notably Saudi Arabia, Iraq, Iran, Venezuela, and Russia, aren’t on track to grow their supply aggressively. It’s growing at a very moderate rate.
What’s more, the currently high prices of gas are creating economic disincentives for those countries to spend more money to expand capacity.
I strongly believe the price of oil and gasoline will continue to grow until we see either greater supply growth, which is unlikely, or demand reduction on a global basis.
This trend will obviously plunge the economy into a deeper recession and will get much worse — but this doesn’t mean that there won’t be fabulous opportunities in the crisis; like the subprime mortgage business.
Everything connected with construction and with consumer, I see weakness, and if anything, it’s accentuating a little bit.
In my adult lifetime, up until the last year or two, there’s been a huge amount of excess supply available. We don’t have excess capacity in the world anymore, and that’s why you’re seeing these oil prices.
Anf if you factor in a war with Iran (more of a likely scenario today) before the US Presidential elections, then the sky is the limit.
What do you think?
Your feedback is always appreciated
Thanks much for your consideration
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