Newsweek Warns Oil Prices Could Hit $200 a Barrel in the Next Few Months

[lovuian]

Newsweek Warns Oil Prices Could Hit $200 a Barrel in the Next Few Months

http://www.enn.com/business/article/37283

This spring, America hit a historic point. With average gas prices per
gallon edging toward $4, America's notoriously profligate ways started
to change fast. Americans are driving less, using mass transit more,
buying fewer gas guzzlers, indeed shopping less wantonly in general, and
lowering their previously unshakable confidence as consumers. Suddenly,
Americans are acting differently; if not exactly like Swedes, then not
quite like themselves, either. It's a shift that could change the world.

And there are more changes to come. So far the price shock has triggered
the most obvious consumer shifts in the United States. Europeans,
already greener, are also are buffered by a stronger currency, and
Asians are protected from the spiking price of oil by subsidies that
control the impact on gas prices at the pump. But if oil prices continue
to rise, and the subsidy dam breaks, as seems likely, the energy
revolution now transforming America will spread. "We sailed through $80
a barrel," notes energy authority Daniel Yergin, author of "The Prize:
The Epic Quest for Oil, Money and Power" and chairman of Cambridge
Energy Research Associates. "But that doesn't mean we'll sail through
$200 a barrel. That sort of price would have enormous global consequences."

A year ago no one was talking about $200 oil, and now everyone in the
markets is, for scary reasons. Oil prices climbed from $10 in 1999 to
$95 last year without slowing the surging world economy, in large part
because the markets believed the spike was at core driven by rising
demand, particularly from India and China, which feeds growth. There was
concern over supply, too, but nothing like the tumult prompted by the
stranglehold OPEC imposed on the world in the 1970s, at least not until
recent months. As the per-barrel price climbed over the last few months,
with futures reaching $135 last week, the consensus began shifting to a
new more gloomy view: that not only would long-term demand, led by China
and India, continue to grow, but that the supply threats, including
increasing conflict, falling investment, industry bottlenecks and
downward estimates of big field reserves in major oil states”¹aren't
going away any time soon. Now many (though not all) serious people take
$200 oil”¹and the prospect of another '70s-style oil shock”¹seriously.
Goldman Sachs warned that the $200 barrier could be hit within the next
six to 24 months.

more...

Soros says its a bubble and Newsweek up up and away
Only Bush and cheney know for sure

[The_Casual_Observer]

1. What's Obama's advice on this?

Is it something like, there is nothing we can do about it now, but we will work toward a brighter energy future?

[notesdev]

2. At that price

all of a sudden a lot of places where it was previously too expensive to extract oil are going to be economically viable, like oil shale.

The bright side is maybe all that development will take the edge off this recession.

[ladjf]

3. If oil hits $200 per barrel there will be NO airlines or trucking

in the U.S. There is simply not enough room in their profit margin to function at that fuel cost level. That's why oil isn't going to hit $200.

[SpiralHawk]

4. "Mission Accomplished." - Commander AWOL & republicon oil cronies