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21 comments on A little more on CERA

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Fernando on September 7, 2005 - 6:59am Permalink | Subthread | Parent | Comments top
Well, Forbes is saying that to the public. But, he is saying the following to his suscribers :

  "Oil and natural gas are on their way to significantly higher levels. You can still buy select oil and gas producers that pay 12% to 14% dividends - and they pay monthly. It doesn't get better than that. There are many reasons to buy oil and gas. Unrest continues to mount in the Middle East, and the so-called terror premium in crude prices will remain until we see at least three years of peace in the fertile crescent. I think that will be a long time coming.

There is a shortfall between supply and demand, and this shortfall is growing. World demand increased 2.5 million barrels a day over the last year due to increased demand in the U.S. and Asia. India and China are industrializing at a feverish pace, and their energy appetite is increasing exponentially. On the other hand, global production is very close to a peak, and there is no "excess" production capacity left. We are at the point where the rubber hits the road, and the only rationing mechanism for who gets the available supply will be higher prices. "

Please check:

http://www.newsletters.forbes.com/servlet/ControllerServlet?Action=DisplayPage&Locale=en_US& id=ProductDetailsPage&SiteID=es_764&productID=10292900

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Freddy Hutter on October 8, 2005 - 1:15pm Permalink | Subthread | Parent | Comments top
Fernando, take care on reading too much into the demand figures.  We'll know better mid-month how Q3 went, but in Q2, a full 2.5-mbd went into stock building, mainly in the OECD.  In short, after the speculators bailed, there was nobody to buy the crude.  Over the last 18 months, the oil markets have become the playground for boomers trying to make up what they lost in the equity markets.  Notice that the Spot price is now commonly 20% greater than contract prices.  Notice that crude spot often has 20% price swings.  This is not supply and demand at work in a normal marketplace.  I fear that there are more commodity brokers in the bidding field than stakeholders.
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21 comments on A little more on CERA

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