$35 Oil: Steve Forbes Was Off by Two Years

The late-2005 call by Steve Forbes that we'd see oil at $35 a barrel has finally been proven correct - it's too bad he said it would happen within a year.
That call looked pretty bad for more than three years and a fair number of barbs were cast in his direction, during which time even his closest friends probably chided him.

Shown below is what results from a simple Google search on the subject:Surely, at least a few reporters have contacted him for a new prediction.

He'd be better advised to either not specify a time frame this go-round or to be just vague enough to be able to claim clairvoyance should he get the price right and the timing wrong once again.

Comments

[laguna_b:]

Lest we see Steve Forbes as an all seer of the future, no prediction is repeatable if the reasons for it are not given and validated. The reality is that oil consumption dropped, the economy crashed and with it further drops in consumption, the dollar gained value as it had lost it on the upside, further feeding back into the system a reduction in oil pricing. In reality we have found no more huge reserves, none since the late 60s when discoveries peaked. Once the consumption inevitably takes up the slack again, we will go right back up past $140 driven consumption, peak oil passing, dollar devaluation as it leaves our shores again, and the same old questions of why didn't we electrify transportation sooner.

2008 Dec 19 01:13 PM

[laguna_b:]

Lest we see Steve Forbes as an all seer of the future, no prediction is repeatable if the reasons for it are not given and validated. The reality is that oil consumption dropped, the economy crashed and with it further drops in consumption, the dollar gained value as it had lost it on the upside, further feeding back into the system a reduction in oil pricing. In reality we have found no more huge reserves, none since the late 60s when discoveries peaked. Once the consumption inevitably takes up the slack again, we will go right back up past $140 driven consumption, peak oil passing, dollar devaluation as it leaves our shores again, and the same old questions of why didn't we electrify transportation sooner.

2008 Dec 19 01:14 PM

[Tesa:]

My mother who has never touched stocks in her life can easily make predictions like that too. If its up then one can predict that it will do down and 2 years is a long time. But did he predict the housing market collapse and credit market collapse.

My prediction is that oil will go up to 100$ again. Let me know when I end up right. I may in fact be an oracle.

What I do know is that break even for XOM extracting oil is about 35$ and that is a cheap one for north America and if it oil prices go bellow then expect major shutting of oil wells and with credit market being poor expect the same scenario for them as auto sector. You can also remind me if end up to be an oracle predicting that.

2008 Dec 19 01:14 PM

[farfignewton:]

Time to start building a position in UCO. There can't be much down side at this point.

2008 Dec 19 01:16 PM

[toomuchgas:]

A broken clock is right twice a day.

2008 Dec 19 01:29 PM

[CoverIsBetter:]

farignewton - You mean USO, right?

I have some nice 85 dollar Calls in that one.
Can I invest in a broken clock?

2008 Dec 19 02:04 PM

[FatPat:]

Interesting claim, not out of question! They did it with Gov Bonds (long), Credit Markets (long), stock market futures (long), Gold (short) and now Oil (short)!

2008 Dec 19 03:16 PM

[AlexS:]

It's not that Forbes was off by two years. It's that he predicted that the next big move in oil would be down and not up. If you bet on his prediction you might have gone broke before the market went in your direction.

2008 Dec 19 09:20 PM

[MNSL:]

Excellent article.

Steve Forbes is correct. Most top oil analysts, economists couldn’t forecast oil prices correctly.

They said oil is going to $ 200. Gold will go to $2000. Now oil is back to $35. Can we believe? I think it will go to $20 sooner than later.

Next in line there are many inflated assets and commodities to fall further. With wealth destruction and demand destruction how can we expect higher prices for assets?

In a way it is good for consumers. It is also good for many industries who struggling to survive. Inflation will come down. Consumer purchasing power will increase.

This is good lesson for all types of bubble funds who invested in hot sectors, derivatives, real estate and highly risk credit and interest derivatives etc, such as Sovereign funds, Top banks, Insurance giants, hedge funds etc. Really they have destroyed other people’s money, wealth, pension funds and retirement’s funds etc.

Could not they invest in some productive industries instead?

2008 Dec 20 02:52 AM

[john s. gordon:]

productive industries are so booooring.
> jack

2008 Dec 20 08:50 AM

[toobad41:]

The tide went out.. all ships were beached...it will rise again.

2008 Dec 20 10:17 AM

[fran:]

did i hear Forbes predict the world economy falling off precipice? financials overleveraged? stocks down 30 to 80 percent? where was the financial acumen of someone so well in tune with the world of money? when we needed perspective on things, did i miss his counsel?
did the big picture, which he failed to see, result in his prediction becoming fact?

2008 Dec 20 10:39 AM

[Gyoza Mimi:]

And I predicted $200 oil. I might be off by a few years, but why cares? As long as I am right, right?

2008 Dec 20 11:12 AM

[Steven Ward:]

Churchill once said that public figures should always prognosticate. That way they get into the public eye twice, Frst their original prediction, the second: explaining why their prediction did not come true.

2008 Dec 20 01:27 PM

[notsosmart:]

good comments. i too predict $200 bbl of oil.will i live long enough to see it?

2008 Dec 20 02:10 PM

[Alamo:]

You talked the talk Stevie Forbes, but did you walk the talk?

How right, Sir Winston's quoted comment above except we haven't heard from Stevie yet, explaining what intervening factor(s) caused his erroneous pontification.. or so)It's always those damn intervening factors that cause an otherwise dead on prediction to miss the target by a mile or 'er 2 years0

Why do these pompous asses comment with absolute certainty and then rarely, if ever, get called back to explain, "wha' happened"?
If they did ---and Forbes is only one of hundreds--that gives us non-stop spiels about what is certain to occur going forward do you think they would tell anyone? If there was an honest bone in their body the only cerain prediction they would make is, " I have no idea what the future holds".

I predict $86.23 oil in 6 months. Why? this is an amount my fingers typed on this key board and my fingers won't tell me what their rationale is. If the future proves otherwise blame my fingers. Right, Steve Forbes?

2008 Dec 20 03:55 PM

[Trinitymaster:]

About ten years ago, oil was $10/barrel. Exxon made tons of money back then as well. At $25/barrel, they would still make tons of money. Until oil falls to the same price as water, oil will continue to be pure profit




On Dec 19 01:14 PM Tesa wrote:

> My mother who has never touched stocks in her life can easily make
> predictions like that too. If its up then one can predict that it
> will do down and 2 years is a long time. But did he predict the housing
> market collapse and credit market collapse.
>
> My prediction is that oil will go up to 100$ again. Let me know when
> I end up right. I may in fact be an oracle.
>
> What I do know is that break even for XOM extracting oil is about
> 35$ and that is a cheap one for north America and if it oil prices
> go bellow then expect major shutting of oil wells and with credit
> market being poor expect the same scenario for them as auto sector.
> You can also remind me if end up to be an oracle predicting that.

2008 Dec 20 04:06 PM

[auto44:]

I like your last paragraph best. i do however think Steve has more of an inside trac than most folks,but I 've looked into a lot of crystal balls and they all look the same,just a clear space.


On Dec 20 03:55 PM Alamo wrote:

> You talked the talk Stevie Forbes, but did you walk the talk? <br/>
>
> How right, Sir Winston's quoted comment above except we haven't heard
> from Stevie yet, explaining what intervening factor(s) caused his
> erroneous pontification.. or so)It's always those damn intervening
> factors that cause an otherwise dead on prediction to miss the target
> by a mile or 'er 2 years0
>
> Why do these pompous asses comment with absolute certainty and then
> rarely, if ever, get called back to explain, "wha' happened"? <br/>If
> they did ---and Forbes is only one of hundreds--that gives us non-stop
> spiels about what is certain to occur going forward do you think
> they would tell anyone? If there was an honest bone in their body
> the only cerain prediction they would make is, " I have no idea what
> the future holds".
>
> I predict $86.23 oil in 6 months. Why? this is an amount my fingers
> typed on this key board and my fingers won't tell me what their rationale
> is. If the future proves otherwise blame my fingers. Right, Steve
> Forbes?

2008 Dec 20 04:49 PM

[auto44:]

I am going to call my bookie(the state of ny) and bet on the number 83236 for the pick five probably have a better chance than betting on a prediction.


On Dec 20 04:49 PM BLITZ wrote:

> I like your last paragraph best. i do however think Steve has more
> of an inside trac than most folks,but I 've looked into a lot of
> crystal balls and they all look the same,just a clear space.

2008 Dec 20 04:53 PM

[speculari:]

You can give them a number or, give them a date - but, never offer both elements in the context of any forecast!

2008 Dec 20 06:03 PM

[speculari:]

Churchill was also credited with the following exchange, when a woman at a dinner party reportedly said... "Winston, you are drunk!", he is said to have responded... "Yes Madam, and you are ugly! But, tomorrow I shall be sober"

2008 Dec 20 06:24 PM

[speculari:]

On a different evening, Churchill was also remonished by another lady when she exclaimed... "Winston, if you were my husband I would poison you! He reportedly said... "Madam, If I were your husband... I would take it!"

2008 Dec 20 06:35 PM

[Rating agen...:]

In spring of oil will go to $ 100.
My marketing research studies confirm this.

2008 Dec 20 10:51 PM

[Ferdinand E...:]

Forbes is a great magazine, but Steve Forbes is hopeless. I was doing the corrections for my energy economics textbook when Forbes made that prediction, but being familiar with his lack of smarts I ignored it. Instead I spent some time examining the predictions/observatio... on oil of one of his subordinates, Mr Helman. Absolutely Fruitcake was my conclusion. The issue however is simple: Forbes believes that he has enough juice to convince intelligent persons that there is no shortage of oil in this old world of ours, which is wrong in the geological, economic, and political sense. Would somebody please inform him.

Ferdinand E. Banks

2008 Dec 21 03:00 AM

[Duude:]

This sure seems like a good time to top off our strategic petroleum reserve. Somehow, I don't think it will happen in the next 4 years no matter the price.

2008 Dec 21 04:44 AM

[fairguy:]

oil will be $200/bbl, one day but i don't know which day, just some day....

2008 Dec 21 05:51 AM

[john s. gordon:]

speculari - you are describing the heisenberg uncertainty principle whereby the position and velocity of an electron cannot be simultaneously predicted.
> jack

2008 Dec 21 08:25 AM

[speculari:]

> jack
I know, I know! And what of the Observer effect & the Copenhagen Interpretation!? Don't worry jack, perhaps tomorrow - Werner, Niels, Winston, as well as you & I... shall all be sober( or more sober, or soberer)!

2008 Dec 21 02:53 PM

[Market Folly:]

hmm don't know if he would be able to predict it as such again... he would have to get rid of the timeframe. wrote about cheap oil recently here: www.marketfolly.com/20...

2008 Dec 21 07:00 PM