Oil futures blasted to a new record of $122 a barrel Tuesday, gaining momentum as investors bought on a forecast of much higher prices and on any news hinting at supply shortages. Retail gas prices edged lower, but appear poised to rise to new records of their own in coming weeks.
A new Goldman Sachs prediction that oil prices could rise to $150 to $200 within two years seemed to motivate much of Tuesday’s buying, although a falling dollar and increasing concerns about declining crude production in Mexico and Russia contributed, analysts say.
The NBC Evening news actually led with the price of gasoline last night as the top story, a highly unusual thing:
http://www.msnbc.msn.com/id/3032619/
Hype.
bl
it’s too bad they can’t put this inthe headline as well:
“Tim Evans, an analyst at Citigroup Inc., countered Goldman’s analysis with a note predicting that crude prices could as easily fall to $40 a barrel……”
Who’s to say Goldman knows any better than Citigroup?
Now that oil has broken the links of supply and demand why not $500 bbl or $10,000 bbl or more? The key in my mind is the squeeze on the gasoline refining and retail fuel dsitribution margins. No one will produce and/or distribute for a loss over time. That is when there will be little if any gasoline available to buy.
Intercessor
We continue to restrict domestic drilling that could reduce our dependance on imported oil. Penny wise pound foolish the old saying goes.
Well, as Samuel Clemens used to say, “Everybody complains about the weather, but nobody does anything about it…”
Agreed, Bob.
Randall
Two large factors in all this is the plunging value of the US dollar and the rush by international investors for the commodity markets. Our unbelievable deficit spending couldn’t go on forever with little repercussion. Times are tough for most Americans, and about to get worse.
As much as we could tweak things in the short run: strengthening the dollar, gas tax holiday, more domestic drilling, etc, in the long run what we so desperately need is new energy sources.
It’s time for Congress to get off their duffs, get busy, and work to solve at least SOME of the problem…….and they could start by taking strong measures to strengthen the U.S. dollar.