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Frank Hovis

Oil Price To Surge, Or Not

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In that its price seems to bear little relationship to reality.

Despite the misleading sub-editor headline the article is really saying that nobody knows. You pays your money and you buys your ETF....

Oil price tipped to soar on Chinese demand


Goldman Sachs raised its oil price forecast for the end of 2009 to $85 a barrel from $65, anticipating dwindling supply and rising demand this year and next.

Its forecast also put prices at $95 by the end of 2010, led by economic recovery in China.

Influenced by these predictions, US light crude rose $2.39 to $68.51, while Brent was up $2.52 to $68.40, sparking fears of a further increase in prices at the petrol pump.


However, John Hall, an independent energy analyst, accused Goldman Sachs, one of the world’s largest oil traders, of scaremongering. He said that last December the bank had slashed its forecast for crude oil prices to just $45 a barrel for 2009, in a sharp U-turn from its prediction of $200 made just months earlier in May 2008.

Though the one I agree with most is in the comments, dollar weakness is a big driver:

Don't forget many traders buy oil as a hedge against a declining dollar. When Oil last hit $147, the USD was very weak trading at 72 on the DXY. If the USD continues to loss value, which is likely due to the FED's QE plans, oil can only go up.

Paul, Horsham, UK

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Smidgen under $70 a barrel this morning but the last few weeks have seen it gradually edging higher.

Given the depth of the recession the price should be depressed but it is driving on....

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supplies are going up, demand is going down and oil is gaining in price.

Imagine what oil might be when supplies are dwindling and demand is gaining.

Oil is going up because the thing it is valued in is going down (dollars). All very concerning.

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Quantitative Shitting is destroying purchasing power.

Bernanke and King are liars, they are not fighting deflation, they are troughing money to bankrupt banks, bailing out the most monstrous gamblers ever seen in finance and getting the public to pay for it in future tax and inflation.

Edited by OnlyMe

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Oil company shares look overpriced to me. I'd guess oil will go back to $150 at some stage, but it will probably go to $30 first.

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Give gold has been used as money for 1000's of years and they are printing money like mad i'm not so sure gold is over priced as you say it is.

wait and see what happpens to gas prices when they get it under the control of a cartel and see just how much money you need to earn to stand still.

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