LOL @ Pun, actually I do not think it will happen anytime soon, BUT it could given the large numbers of Chinese and Indians getting a lot better wages and their standard of living is skyrocketing, this will lead to everyone wanting a car and having the financial ability to own one, with their numbers even a small increase year by year will have profound impacts upon the markets. We will definitely see it in our lifetime so long as we do not actively pursue other more environmentally friendly energy resources and remain dependent on fossil fuel sources.
SmartMoney Digest 1/17/05
New scare: Oil at 60 dollars and gas at 3 dollars?
While political scares dominate the headlines this month, last summer it was oil. Last month I received a mailing from perma-bear Don McAlvany predicting an overthrow of the Saudi royal family and $60 oil, but he was suprisingly modest in his oil projections. Resource stock specialist John Myers of Outstanding Investments predicts $100 oil (I can only wish, hehehehehehe
).
America has plenty of gas and oil. In fact, the price at the pump fell below $2 a gallon, even as oil surged above the $45 mark. The problem lies in our oil refining structure (guess we are like the Iraqis to a small extent). Big oil companies have been burned by too many collapses in the past. In 85-86, oil fell from $40 to $10 in a few months (I remember that one, Texas speculators hated it with a passion). In 91, oil went from $40 to $20 in one week! In late 98 (I'm sure Mu remembers this one VERY WELL) oil fell to $11 a barrel.
These wide swings have spooked the big companies from shelling out too much R&D money or upgrading the existing oil refinery infrastructure, now badly in need of repair. Major oil companies need relative oil price stability, at a fairly high level, to give them incentives for new exploration and expanded refinery capacity. The ideal solution is mid-$30s (Nooooo, then maritime will not make so much MONEY transporting the stuff!
), to make capital expenditure profitable for the giant oil companies.
The author is Gary Alexander and he is man enough to admit that even though he recommended a strong buy on oil in Dec 03, he did not add them to his core portfolio. We all know what a banner year 04 was for oil and maritime, mainly due to the hurricanes in the gulf shutting down port facilities or damaging them, China's and India's sudden thirst for petroleum products and flexing of economic musclepower, and sadly, the lack of our refineries being able to keep up with demand, hence supertankers getting paid while they waited to offload. Gotta love it, bad weather, hungry nations, and war and strife in war torn oil producing nations!
Topic: Hydrogen cars are coming (Read 1110 times)