Summary: Jas Jain sticks with $20/barrel price prediction for crude oil.
- Chart and Quote for Crude Oil Prices
- WTIC (West Texas Intermediate Crude) - Crude Oil Price Per Barrel History
-------- Original Message --------
| Subject: | Crude Oil Supply-Demand & Prices--Re: Wholesale gasoline heading $0.80-$1.00 or more lower . . |
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| Date: | Sun, 24 Jun 2012 10:15:37 -0700 |
| From: | Jas Jain <jas_jain |
Crude Oil Supply-Demand & Prices--Re: Wholesale gasoline heading $0.80-$1.00 or more lower . .
To: jas_jain
Subject: Wholesale gasoline heading $0.80-$1.00 or more lower . . .
Date: Sun, 24 Jun 2012 08:44:00 -0700
Subject: Wholesale gasoline heading $0.80-$1.00 or more lower . . .
Date: Sun, 24 Jun 2012 08:44:00 -0700
. . . and oil back to the $30s-$50s by next year, consistent with another global deflationary contraction.
Coming from a Peak Oil guy this is quite a forecast. My forecast prior to the Crisis of 2008 was, and still remain, $20 per barrel, when the deflationary depression can no longer be postponed into the future. I happened to be in India in November 2008 when the oil prices were falling and in my hotel room I had my brother, who owns one of the largest petrol stations in India, and am American friend who accompanied me. They both were arguing that the crude prices can't fall below $45 because the Saudis wouldn't sell below that prices and below $35 because the cost of production would be higher. The price soon thereafter fell below $35 and there was such problem with crowded oil tankers full of oil in the gulf that one could have bought Saudi oil below $29 in December 2008. The price drop of some 80% from the peak didn't last long as there was huge stimulus by govts, led by China, to avoid the global recession. I think that in the coming months, after four years of the lows in crude prices, that stimulus would wear out and the world economy would find itself in a far worse fundamental situation than in 2008. The supply has already exceeded the demand (graph attached) and the inflation-adjusted price of crude oil, $18-28 per barrel, which lasted for 27 years, as seen in another graph, would be breeched to the down side when the first truly global depression becomes a reality because govt interventions can never avoid depressions, they only make it worse to get out of it. Needless to say, the depression would be deflationary.
Jas 
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