The Oil Drum

On Dec 27, 2007,Nate Hagens posted a poll of oil price volatility in 2008. I predicted the following:

I'm going with a high of $109 and a low of $83, for a range of $26, which is 27.1% of $96.

That puts me in #3 which is my guess.

Mild but prolonged US and EU recession in 2008 combined with continued but slower growth in Asia will keep prices from going too high or too low. Relative stability world wide during 2008 election campaign and increasing relative political stability in the Middle East will keep prices relatively stable.

Wild cards: Turkish/Kurdish situation may get out of hand. Relative "stability" in Iraq could deteriorate quickly. Potential domestic turmoil in Saudi Arabia could destabilize the country. Potential, although not probable, serious 1930's style depression in US could cause prices to drop significantly. US sponsored destabilizing action in Venezuela (unlikely) or significant rise in tensions between Russia and US could affect volatility.

If wild card events occur, all bets are off re volatility. I will, however, stick with my #3 (27.1%) prediction.

I think I will stick with the low of $83. Although, my high of $109 has been passed at $111, but not by much.