Goldman ups top of 'super OIL spike' range est to $105/bbl (Peak Oil)

[cthrumatrix]

Goldman ups top of 'super spike' range est to $105/bbl

NEW YORK (MarketWatch) -- Goldman Sachs believes the oil markets have entered the early stages of a "super spike" period, which Analyst Arjun Murti defines as a band of oil prices that could be high enough to reduce energy consumption substantially and create a spare capacity cushion that could reduce energy prices return. Murti increased his super spike range to $50 to $105 per barrel from $50 to $80 per barrel. He also increased his 2005 forecast for West Texas Intermediate oil to $50 per barrel from $41 and his 2006 estimate to $55 per barrel from $40. Murti recommends adding to positions in the oil sector "at current prices, on a pullback, or even after rallies," and raised 2005 and 2006 earnings estimates across the board.

snip

http://cbs.marketwatch.com/news/newsfinder/pulseone.asp?dateid=38442.3828862616-833716017&siteID=mktw&scid=0&doctype=806&

Get ready for OUR "culture of life" to do down the shitter because OUR GOVT leaders have ingored this oil issue for the past 30 years.

The US citizens are like a "frog in hot water"...ready to boil.

[The_Casual_Observer]

1. Yes, but in terms of "real" dollars, doesn't oil have to be

something like $1,000 a barrel to make a difference, according to the "analysts"? Since energy and food are not counted in the inflation computations, it wouldn't matter how much it cost.

[cthrumatrix]

2. when the price of gas hits $4.00 .... the economists will "self destruct"

[ozymandius]

3. Excluding energy and food from the CPI is a sham.

Mere window dressing. The only reason to exclude these expenses is to hide the recklessness of their economic policies. The CPI report is, in fact, a lie of omission.

In terms of real dollars - $1k per barrel would send the world charging to denominate the petroleum trade in other currencies than the petro-dollar as fiat currency.

[rustydad]

7. Two scenarios

In a normal world of commerce when a commodity is not able to meet demand which is what Peak Oil is about then several factors can weigh in. If the commodity is replaceable, say it is lobsters, then lobsters can be replaced with crab meat. Unfortunately crude oil is simply not at this time replaceable by any known energy source. If replacement is not an option then demand destruction will arise. That is the price of the commodity will rise until the price brings less demand and a balance will be in place. This means that somebody has to get less oil than they now do or than they want as in China. Usually this would mean the poor give up more and the rich carry on. This will happen but in the US our economy is built on transportation supplied with ultra cheap fuel. The rich depend to a degree on having the poor get around. Those nannies, gardeners, teachers, firemen, cops, etc. can't drop out of the economy without adversely effecting the rich. We are all in the same societal boat and if the engine quits for lack of fuel we all sink together I fear.

On the other hand a big strong country can potentially use it's military to conquer oil producing states and take by force the oil it cannot pay for on the open market. This is the neocon strategy. But Iraq has shown us that using the force of an invading army takes a lot of army, and without the mass of army you get ever ending chaos. If the neocons get their way look for a ME war zone where nukes are used to depopulate the oil states in preparation for US control. Then watch as Russia, India, EU, and others line up against the US and Israel. Not a pretty scenario. Bob

[ozone_man]

12. I'd say we're on the course for plan B.

Whether or not the course can be changed is up to us, but I'm worried. I do think that an attack on Iran and Syria could draw Russia into war. Let's hope the neocons are stopped in time.

I hope that the Democrats can summon enough backbone to fight this PNAC agression. Or will they comply as they did with the Iraq war? Time for Dean to revitalize this party, time for a backbone transplant.

[gulfcoastliberal]

4. Well, if you want to invest in the sector, here are my picks:

TOPT - Top Tankers
OMM - OMI Corp
CHK - Chesapeake Energy
EON - EON Energy
ECA - Encana


hardly socially concious picks, but with rising commodity prices they should continue to outperform other sectors.

[cthrumatrix]

10. what do you think of the Canadian Oil Trusts...like ERF (Enerplus)

paying a nice 10% dividend?

[PATRICK]

5. So the oil companies act

like a government imposing policy on the people by gouging them, it seems, far beyond the rising costs of production. That money will do nothing except throw the world into a death spiral unless a good chunk of that price is earmarked for transition. A chunk big enough to be a REAL sacrifice on the part of the oil producers. No they want to retain their clout by making money all the way down and fearfully grabbing MORE vital world resources to replenish their power needs. Not in their wildest dreams could they think of a responsible way out of this. As for forcing down consumption this is worse than "crude". It can't work with the biggest and richest wasters but can devastate the middle to lower classes and the entire infrastructure.

Expect the rich to "castle" themselves behind armed goons.

[WMliberal]

6. after watching oil go from $24 to well over $50 in just four years of *,

I don't doubt it. I wouldn't be surprised if it happened inside of five years.

[mhr]

8. It Always Amazes That When A Wall-Street Economist Blesses

An idea then people listen. Lay people that have been warning about Peak Oil for years were routinely ignored.

Well it's good to see people finally paying attention.

[cthrumatrix]

9. and meanwhile "the Chimp" does nada.......................go spend your $$

[fedsron2us]

11. The inaction of the US government may be deliberate

Some analysts think that the White House is intentionally exacerbating the energy crisis in order to undermine the growth of the Chinese economy. It would not be the first time that a Republican administration had used the oil price as a political weapon. The Goldman Sachs predictions just help to prime the market

http://www.lancasteronline.com/pages/news/local/4/13108

An article in this months Wried magazine highlights the importance of oil to Chinas plans for growth

After food, oil is the most important issue for Chinese economic planners. Without an increasing supply of oil, high GDP growth will be impossible, creating unemployment and social unrest, potentially threatening the government's hold on power. That's not all. Dependency on foreign oil, in Yang's opinion, inevitably leads to war. Every official I interview makes the same point. Yang uses a pun to summarize the leadership's view: "If you pump for oil, you have to fight wars for it." (Pump and fight sound similar in Mandarin.)

http://www.wired.com/wired/archive/13.04/china.html?pg=2&topic=china&topic_set=


The name of the game is to maintain US political and economic hegemony.

As long as the price of oil is denominated in dollars and the profits are recycled back through the US banking system and capital markets do not expect the current administration to take any more than token action to prevent a spike in the oil price.