OPEC warns oil prices could rocket to $500 per barrel

The nightmare scenario of oil reaching $500 a barrel within a few years was raised by a member of OPEC's governing council. Such a rise would also pose a serious threat to economic growth in oil importing countries. "If the dollar's value continues to decrease and if the political crisis becomes worse, the oil price would reach up to $500," Iran's OPEC governor Mohammad Ali Khatibi said in an interview. "If there is another war in the region, it will not only be Iran's oil not reaching the market, but rather the oil of the whole region would be cut from the market," Khatibi said. "In that case, we will not have a price rise. We will have a price explosion."

$5000 gold, $500 oil. If the 10:1 ratio holds up till then. Could turn out to be conservative. If global hyperinflation kicks in, the sky isn't the limit and we're not just going to the moon - the new limit would be somewhere in the next galaxy. For a preview of a possible global future, refer to Zimbabwe and their $100 billion banknotes. We're probably long past soft landing scenarios now. Hope for the best, prepare for the worst.

NYMEX crude oil gains a third day on US-Russia tensions, dollar weakness

bloomberg.com :

NYMEX crude oil prices rose on speculation that Russian crude may be disrupted because of rising tensions with the US, and the weaker dollar bolstered commodities. US plans for a missile shield in Poland will "spur an arms race" in Europe, Russia's Foreign Ministry said. About 1.1 million barrels of Caspian Sea crude remains shuttered following a pipeline fire in Turkey on Aug 5. Crude oil for October 2008 delivery rose $2.69 to $118.25 a barrel, recovering from a steep correction that took it down from $147.27 to $111. The September contract expired yesterday at $114.98. The US dollar slipped to a one-week low of $1.4832 against the euro. Gold gained to $817.61 an ounce.

- As I am writing this, NYMEX crude oil prices are up $8 to $119 from the recent low of $111, and gold is up $56 to $830 from the recent low of $774. Unless this is one heck of a bull trap, it looks like the summer lows could be behind us, proving my Beijing Olympics shutdown hypothesis. There will surely be lots of volatility on the way, volatility being a hallmark of commodity markets. We are back on track to $200 oil, and the next immediate resistance levels are in $10 intervals from $120, $130, $140 and the big one : $150. Support levels are $110, $100 and $90, but we wouldn't count on those now, would we?

(2008-08-21 21:16:41 SGT) [Energy] Permalink

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