to blast, can you write regarding fair oil price?

**philzhang2004** Fri Apr 01, 2005 3:11 pm

to blast, can you write regarding fair oil price?
does it justify 100$ a barrell? in 70's there is a sanction. in 200x, there is a dollar devaluation. What's the global gas producer and their share of gas produce, reserve? what's the global gas consumer and their share of gas consumed? Thanks!

**jeep** Fri Apr 01, 2005 3:26 pm

I assume you are talking about oil productions. IMO, there's no "fair" price of oil since the supply is not even decided by the market but by the cartel composed of a few countries.

It's hard to take the Goldman Sach's research seriously: the same person predicted that the average oil price would be $3x during 2004 but it turned out to be $4x. A $1xx oil price means on the supply side, one of the biggest oil production countries, such as Saudi or Iran have to stop producing oil. This is unlikely to happen without a war.

**philzhang2004** Fri Apr 01, 2005 3:33 pm

jeep wrote: I assume you are talking about oil productions. IMO, there's no "fair" price of oil since the supply is not even decided by the market but by the cartel composed of a few countries.

It's hard to take the Goldman Sach's research seriously: the same person predicted that the average oil price would be $3x during 2004 but it turned out to be $4x. A $1xx oil price means on the supply side, one of the biggest oil production countries, such as Saudi or Iran have to stop producing oil. This is unlikely to happen without a war.
HI, jeep, you look like a much experienced investor. May I know the facts that backing your assertion that a 1xx$ oil price requires a war to justify? Bow...

**jeep** Fri Apr 01, 2005 3:50 pm

The $1xx Goldman Sachs talks about seems to be meant for a longer time cycle (>> 1 year). In fact, It recently raised its 2005 and 2006 price forecasts for U.S. light crude to $50 and $55, respectively, from $41 and $40 ( :wink: what the hell... $10 target increase because the oil price is already higher than its earlier target?).

For the war thing, $1xx oil price over short term need abrupt change of supply or demand or both, but demand can't change over night. Unless there's a war in one of the biggest oil supply countries, abrupt supply change is unlikely to happen either.

Well, all that said, since Goldman Sachs is talking about a very long term of > 5 years, it's a hell of a joke. We can't even forecast global climate accurately in the next 5 years.

**blast_investor** Fri Apr 01, 2005 3:55 pm

I read that article in WSJ too. Goldman Saches said $50 - $100 range.

$100 number is just meant to catch folk's eye.

Goldman Saches is exception. Most Wall Street analyst prediction on oil price is lower than I believe.

Here is my belief on oil price: high oil and natural gas price is going to stay for long time. This is due to supply and demand.

**blast_investor** Fri Apr 01, 2005 4:01 pm

I do not necessary agree with oil price $100 price tag. Actually this is not important. We do not need this high price tag to make money in energy stocks.

But I want say: Most Wall Street analysts need to wake up to the reality of high oil price and high natural gas world. Oil price is not going to 3x world.

There is shortage of oil in the world and shortage of natural gas in USA. The supply is not there and demand is increasing every year in US and China and the world.

By the way, right now Saudi and Cartel do not really control oil supply that much. Their production is very close to maximum.

If oil price does go up and more drilling start to happen today (not there yet), it will take years to make more supply.

This is not nice world for energy consumers, but wonderful time for us energy investors. :D

**jeep** Fri Apr 01, 2005 4:04 pm

Before the Democrats take over the White House, I stay cautiously optimistic on oil/natural gas sector. :wink: