True North_

My Oil Outlook

Todd's link indicates that he's a buyer of oil (perhaps including oil-related stocks?) at $40, which suggests that in the short to medium term he expects it to fall. Given current supply/demand parameters, where US and European storage levels are nearing record levels, to say nothing of the oil that has been stored at sea (anyone got any information on whether that is starting to come in now?), I'd have to agree with him. While long term views may be upward, it is still a commodity and there remains, for now, an imbalance in available supply compared to demand.

One comment on the oilsands - you need to take care to distinguish between existing producers' costs (including the costs of expanding their existing production) and those of entirely new sites. The former are currently running costs of between C$30 - $35/barrel (e.g., Suncor, Syncrude). That's about US$25-30/barrel at current exchange rates. Properly managed expansions will see their costs rise, but they will probably remain under US$35/barrel overall.

New sites, which require the full panolpy of infrastructure to process the product and bring it to market, do require higher prices. For them, they probably need long term prices in the US$60-70 range to justify their investment and risk.