Oil prices have peaked

[jdobbin]

http://www.ft.com/cms/s/0/99e4c70a-6944-11...00779fd18c.html

World oil consumption is now growing at a significantly lower pace than had been imagined a year ago. Last October, the International Energy Agency was forecasting global demand growth for 2008 of 2.1m barrels a day, with 750kb/d from the OECD and 1.33mb/d from emerging markets. In their latest monthly report, the IEA has slashed this by more than 60 per cent to 800kb/d, with OECD demand actually forecast to decline by over 600kb/d and emerging markets demand to grow by 1.4mb/d.

In our judgment, the IEA’s forecasts for emerging markets will turn out to have been far too optimistic by year’s end and OPEC countries will again complain about the inability of oil importers to guarantee sufficient demand growth to warrant investments in expanded production capacity.

There are some fascinating insights in regards to oil demand including some things they say in regards to China.

Their final prediction is for prices to be in the $90 to $100 a barrel. What's missing is how fast that will be achieved.

[Pliny]

Their final prediction is for prices to be in the $90 to $100 a barrel. What's missing is how fast that will be achieved.

My prediction several months ago was oil had reached it's top bubble price and would drop over the summer settling somewhat higher in the fall than when the price started rising but $200/barrel was impossible. All "the sky is falling" experts said they expected oil to be $500 by the end of the year. Being fairly recently self-educated in some economic fundamentals I am happy with what I was able to predict.

Now if all sources of oil dried up tomorrow I would be proven wrong but that is what Capitalism is, sizing up the risks.

That one is not likely. It may be that an escalation in world hostilities occurs and that would increase demand and restrict supply so consequently prices would increase.

Well got to go!