Crude oil expert Philip Verleger, who correctly predicted oil would hit $100 back in 2007, is now forecasting $20...this year!Verleger says that supply is outpacing demand by 1 million barrels a day - and with the global economy not really improving, a warm winter could prove to be "devastating" for oil prices.
This jives with the outlook for crude that we looked at last Friday - there's just too much of it right now!
I imagine that $20 oil would probably destroy commodity prices across the board. Be very careful with your long positions, and if you are enterprising/brave, there may be some great short plays to be had in the very near future.
Hat tip to our friends at The Daily Crux for this nice find.
4 comments:
OK, and then where is it going? I lived through $10/bbl oil ,and that was a gift. With production declining at 10%/year, low prices are not sustainable. Is it any wonder half of Georgie Soros's investments are in the oil sector?
Buy the out month contracts, unless you think we've reached a permanent demand plateau. Moron.
How come you peak oil guys get all flustered at stories like this?
The analyst mentions a very short term time horizon, not a terminally low price for oil. Do you really think this is outside the realm of possibilities?
He is not the first prominent forcaster to predict and audaciously low price for oil. Prechter predicted $10 oil in August 2009.
And it has been said, in the stock market, you should pay attention to the most outragious forecasts such as the one that we could see the S&P at 1000 in March 2009, before the year is done.
Good point Peter, and thanks for bringing up Prechter's $10 oil call - I love that one too!
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