The Oil Drum

This post is not aimed at the author above I just thought it would be a good place to insert it.

louGrinzo's last comment about others coloring us as a bunch of catastrophist loons makes a lot of sense to me.
This is in fact the reason I mentioned the $200 in the first place. Pumping up doomsday scenarios to draw attention to the cause ultimately hurts the credibility of the cause.

For the last three years I have expected and predicted higher oil prices in line with what has actually happened, and I continue to feel that will be the direction of the trend. But I felt there were realistic limits to this trend in the short term. That's why the quote struck me as odd.

So here it it. It was posted on Land of Black Gold in late October. The original Reuters link has been removed, at least I couldn't get it to connect. some of the material appears to be written by the author of the blog. You can visit personally if you like.

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Reuters: Oil guru says crude could hit $190 this winter.

The title should really point out that he talks about natural gas or oil.

Quotes:

Consumers should brace for crude oil and natural gas prices possibly doubling or tripling this winter, Matthew Simmons, a best-selling author and oil-supply bear, said on Wednesday.

"Prices are really cheap today and they need to go a lot higher, and they probably will go a lot higher," Simmons said in Ottawa.

"I am very concerned, given the destructive damage done by (Hurricanes) Katrina and Rita, that the United States must be closer to starting to see significant product shortages than we've seen since 1979."

Too much got destroyed and too little has been brought back on stream, the Houston-based analyst said.

He also said that cold weather this winter could bring a very high risk of natural gas curtailment in the United States.

"Either one of those events (oil product shortage or natural gas shortage) could send prices two to three times higher than they are today," he said after a speech in Ottawa.

That could translate into natural gas prices of $40 per million British thermal units from more than $13 now, he said. Doubling or tripling crude would put it in the range of $125 to $190 per barrel.

"Everyone keeps thinking there is a (price) ceiling...There is no ceiling," said Simmons, who wrote in his book "Twilight in the Desert" that Saudi oil output is at or near its peak.

He said he has seen little sign that higher prices so far have done much to reduce consumption.

Simmons said supplies of heating fuel oil were in okay shape, but could drain fast if the weather turned cold. Diesel is tight and shortages of jet fuel had caused some planes to be diverted from some airports.

"It's going to be painful for people to get used to actually paying real money for a really valuable resource," he said.

** end of citation

http://lobg2.blogspot.com/2005_10_01_lobg2_archive.html

Yes, it wasn't $200+, it was actually $190. No, he didn't "predict" it would go there, just suggested it could. But, that is how I remembered it. I apologize to anybody I've annoyed with my careless inattention to details. It would also be nice if we paid closer attention to the validity of other numbers and their importance, rather than just those of the Great God Simmons.

Keep in mind, no matter how much you may agree with Simmons (and I do) - he is still selling books. Don't take that as an accusation, just keep it in mind. He has every temptation to let his forecasts slip in an upward manner. If he did in fact say what he did, it would appear to be not so well thought out.

For the record, I have read his book cover to cover. I am not, and have never been a "POD."