johnnymk

From a newsletter I receive "Money and Markets"



Oil’s bull market remains much stronger than most have expected. Corrections will come and go. But after every one, oil marches to new record highs. The primary reason: Six forces that are largely unstoppable ...

Force #1: Oil demand continues to explode. OPEC is nearly maxed out. The world now needs nearly 83 million barrels per day. And as I pointed out last week, just five years from now we would be facing a deficit of as much as 17 million barrels per day, enough to send oil prices to well over $100 a barrel — and gas to over $3.50 a gallon.

Force #2: Russian oil production is slowing. The world’s second largest oil exporter is running at less than half of last year’s growth rate. And due to all the problems with the Russian producer Yukos, it’s not likely that production in Russia will increase dramatically anytime soon.

Force #3: Norway, the world’s seventh largest oil producer, is also in bad shape. Bad weather. Old equipment. Strikes. And more. End result: Oil production is nearly 9% lower than a year ago.

Force #4: Gulf of Mexico production is STILL in disarray from last year’s Hurricane Ivan. And now, the U.S. Weather Bureau has just updated its already-dire forecast for the current hurricane season: It will be EVEN worse than previously expected.

Force #5: No change in Iraq. Iraq’s pipelines are still being blown up left and right. Oil production in the country is now 40% below capacity and 50% below pre-war production.

Force #6: New war fears. New world tensions are smoldering — between the U.S. and North Korea, between North Korea and Japan, between Japan and China, between China and the U.S. — not to mention between Iran and most of the Western world. Even if none of these explode in the near term, the mere fear of a blow-up is keeping upward pressure on the price of oil.

Just ONE of these six forces would be enough to propel oil prices sharply higher! The combination of more than one will be explosive.

Stay tuned. The next move could be even more explosive

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“Socialism is a philosophy of failure, the creed of ignorance, and the gospel of envy, its inherent virtue is the equal sharing of misery.” (Winston Churchill)

InfiniteNothing

So... what I'm hearing is "Invest in oil interests?"

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As for our common defense, we reject as false the choice between our safety and our ideals.

IrishSS

Or, as the average consumer would say, the 6 fundamental forces are:

1. Greed
2. Greed
3. Money
4. More Greed
5. More Money
6. Greed and Money


While I'm not discounting your points, as they are all extremely valid, the OPEC members have no reason to bump up their oil production. They can produce whatever amounts they want and charge whatever they want. They know it and so does the rest of the world.

If you're in the oil business at this point, you're making more money then you could have ever dreamed of.

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Spigs, you MFR#1N!