megiddo666

Recession Fears Will Bring Oil Down to $70

Appreciated your thoughts, however there are a few factors that may change the assumptions.

Chinese private vehicle ownership in 2007 was up 10.92 percent over 2006. Trucks ownership increased 7.5%. China added 15 million new drivers in 2007. China will build over 2000 miles of new interstate highways in 2008, not including new provincial highways and will still not have completed its national highway system. Chinese new car sales are expected to be increase around 20% yoy in 2008.

The Chinese are already experiencing long lines at gas stations, and trucks are rationed diesel purchases in many cities and provinces. China is still expanding its national petroleum reserves.

This demand problem is not one that will be solved soon. This does not consider increased oil use elsewhere, outside the US and Europe.

On the supply side, OPEC is not increasing production and has stated high oil prices will continue through 1Q 08.

Given the above, I would expect gas prices to rise to meet oil costs as much as oil prices to decline.