The Oil Drum

Interesting times, indeed. Oil (NYMEX WTI front month future) closed at record intraday trading high of $78.77 per barrel on August 1st, but has since fallen back to near $70. The markets are clearly shaken, and suddenly people are realizing that the recent explosion of derivatives has created as much hidden rigidity as resiliency in our financial markets (as I wrote about here). Is this the beginning of economic collapse, or just another minor perturbation?

I would like to begin, despite the title, by wishing you each, individually, a Prosperous and a Happy New Year.

The past year has been an interesting one to watch, and comment on, and I would hope that this site will continue to be of interest to you as the topic evolves over the next year. And let me quietly suggest that the topic is likely to remain sufficiently evident that Halfin's suggestion of a change in emphasis is unlikely to come to pass.

The problem with making predictions, and I suppose also the fun, is that there are so many imponderables, such as the weather, that can make them into so much hot air or wasted electrons which, as we have discussed relative to predictions from folks such as CERA, can later make them embarrassing to have to recognize. And given that FTX has collected some of the more interesting ones already, maybe I should avoid that route.

So instead of making them as predictions, perhaps it would be better to frame the following as areas that will likely get more interest from the main stream media in the next year, and thus, in turn, get a greater share of public awareness.

Let's visit the wayback machine...(cue Wayne's World-ish "diddly-doop, diddly-doop" sound and the screen wobbles into a flashback...)

HO's "Not if, but when on $80 oil" (and that's without a hurricane, eh?)
JDH's "$100 a barrel--what are the odds?"
Boone Pickens' Oil at $75 by the end of 2005.
John Robb's "$100 Oil?" (if you haven't read JR's front page lately, do so.)
Ali Bakhtiari's prediction of >$50/bbl at ASPO over three years ago. (my favorite quote from this one: "If there was nothing to be worried about, then there would be no price increases," explains Bakhtiari.)
Goldman's super-spike (courtesy of our friends at Energy Bulletin).
Matt Simmons calling the true value of oil at $182/bbl or that oil could be $100 in six months (ok, so he was a little off on that one).

Anyone else have any nominations for the wayback machine? Link and discuss some of the other valuations/price predictions out there.