Money Oil Speculator Speculates Oil To Go Ever Higher!
posted by May 21 at 13:15 PMon
Arjun N. Murti remembers the pain of the oil shocks of the 1970s. But he is bracing for something far worse now: He foresees a “super spike” — a price surge that will soon drive crude oil to $200 a barrel….
An analyst at Goldman Sachs, Mr. Murti has become the talk of the oil market by issuing one sensational forecast after another. A few years ago, rivals scoffed when he predicted oil would breach $100 a barrel. Few are laughing now. Oil shattered yet another record on Tuesday, touching $129.60 on the New York Mercantile Exchange. Gas at $4 a gallon is arriving just in time for those long summer drives.
Let me get this straight, an analyst at an investment bank, whose traders are profiting massively over the rise in oil prices, is bleating in the pages of the New York Times that oil is going to continue to rise, forever. This is the bubble that won’t pop. Buy now! BUY!
Don’t kid yourself. Indeed, there are legitimate pressures on the oil market, reasons why price should be way higher than before, mostly involving unprecedented demand. But, as I’ve pointed out elsewhere, there are massive untapped reserves of oil-alternatives, like oil sands, oil shale, the probable massive arctic oil fields (revealing themselves thanks to the melting ice cap) and liquefied coal. All come at horrific environmental costs, but at prices in excess of $120 a barrel, it’ll happen. Likewise, if prices stay at this level the global economy will grind to an absolute halt, solving the demand problem in a tidy way that throws us all into misery.
A “super spike” eh? In every pump-and-dump scam, the noise first starts quietly. Only as the last round of suckers are to be recruited, does the flame fanner who “rarely grants interviews, citing concerns about privacy” go public to declare the rise will never end.
Wrap the whole thing in an astroturfed pro-green message:
But the grim calculus of Mr. Murti’s prediction, issued in March and reconfirmed two weeks ago, is enough to give anyone pause: in an America of $200 oil, gasoline could cost more than $6 a gallon.
That would be fine with Mr. Murti, who owns not one but two hybrid cars. “I’m actually fairly anti-oil,” says Mr. Murti, who grew up in New Jersey. “One of the biggest challenges our country faces is our addiction to oil.”
High prices, he says, “send a message to consumers that you should try your best to buy fuel-efficient cars or otherwise conserve on energy.” Washington should create tax incentives to encourage people to buy hybrid cars and develop more nuclear energy, he said.
He owns two hybrid cars. Well, mercy me! A real environmentalist, unlike someone who lives close enough to work and what he needs to live as to not need a car at all.
Don’t get me wrong. The era of $10 a barrel gas is probably never coming back. Honest analysts, foreseeing the end of this latest speculative game, predict $70 a barrel oil when this latest financial-market-produced bubble pops. That sounds about right.
Dotcoms, energy, housing, dotcoms (again), now energy (again)—one trader scheme after another, like we’ve returned to the 1920’s. Any shock, after we allowed these massive financial institutions to write their own rules again?