ValueInvestor

Why Is Oil Trading at $53 When Supply and Demand Is So Bearish?

Do you really think a country like India, where people need the cheapest car in the world just to afford one will be able to afford $145 oil. I don't think so. They'll all have Nano's in the driveway and still be walking to work.

The simple fact is the world couldn't afford $147 oil last year so how on earth are we supposed to afford it next year and beyond? We can't, so the supply and demand lines will move accordingly. Remember, the solution to high prices is high prices.

On Mar 24 08:22 AM longoil wrote:

> $145 oil will look like a bargain by the middle of the next decade.
>
> Oil demand is ramping slowly around the world.
>
> In India, the Tata car (priced at $2050) was officially launched
> today. The target market in India for this car is the middle class
> (currently numbering at 50 million people). This number is expecting
> to hit 583 million by 2025 according to McKinsey & Company. That
> is equivalent to adding two more United States size consumer groups
> in competition for the dwindling world's oil supply.
>
> Next to India, China is taking advantage of the drop in resource
> prices and buying up everything from copper to oil. They have been
> signing long term deals with Russia, Brazil, Venezuela, Iran, etc.
> The loading up their SPR's feverishly with cheap oil. The Chinese
> are thinking long term.
>
>

Why "Drill, Baby, Drill!" Does Not Translate Into Effective National Energy Policy

To be energy Independant the US would have to offset their imports of approx. 12 million barrels a day. This is a monsterous amount thats larger than the peak of 10 million bbl/day that was produced in 1970. With current production at 5 M bbl/day drilling would need to increase domestic production to 17 M bbl/day. Do these drilling advocates know that this is impossible?

Excellent Stocks When (If) Oil Hits $150

This is a funny list. Why would they be good at $150 and not $140 or $135. There's no reasoning what-so-ever. What a joke.