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    $450 Oil in a decade?

    MoneyNews - America's Money News Page

    Yamada: Oil Could Pass $450 In a Decade


    Thursday, May 29, 2008 12:28 PM


    You think Goldman Sachs was reaching when it said oil could spike to $200? Try Louise Yamada on for size.

    The former Citigroup analyst sees oil going to $450 inside a decade.

    Based upon fundamental demand and technical market factors, Yamada says much higher oil just makes sense.

    “If the present rhymes with history, oil prices might be expected to advance significantly ($253 to even above $453) over the decade ahead,” she wrote in a report to clients.

    Yamada is managing director of Louise Yamada Technical Research Advisors, a firm she founded in October 2005. Prior to that, she spent more than two decades at Smith Barney, where she was the top-ranked market technician for four years.

    Population of “six billion…and rising to nine billion, with greater and growing energy demands (electricity for technology, air conditioning, etc.) than ever before,” leads her to believe demand will continue to outweigh supply in the oil market.

    Current output of oil worldwide is expected to rise to 116 million barrels per day (bpd) by 2030 from 86 million bpd, according to the International Energy Agency.

    This represents an average increase of 1.3 percent a year, just below the average increase in demand of 1.4 percent per year. Although Yamada relied on historical price charts to derive her price targets, the fundamentals support significantly higher prices.

    Yamada has been right on long-term market calls before.

    Her clients profited when she correctly predicted the 1999-2000 declines in tech stocks, the new bull market in gold which has lifted the metal past $1,000 an ounce, and the extended low interest rate trading range in bonds.

    From a technical perspective, she relies on historical trading patterns and calculates a gain of more than 1,000 percent from the 2004 breakout point of $40 a barrel. This provides “an outstanding (and astounding) target of $452.92 per barrel!” she warns.

    Besides the imbalance in supply and demand, the dollar is also contributing to higher oil prices, in Yamada’s opinion.

    “One might also need to factor in our technical observation of the structurally declining U.S. dollar, which over the long run, may contribute to, and even exaggerate, these seemingly astonishing triple-digit targets,” she wrote.

    Yamada is bullish not only on oil, but also on oil stocks. As a group, she points out these stocks have room to double based upon factors such as their relative weighting in broad market indexes.

    She highlighted Chevron, Anadarko Petroleum, and Halliburton in recent comments.

    Consistent with this analysis, she also likes agricultural commodities and food stocks, thinking inflation will increase and higher prices will lead to greater profits for producers and processors. In particular, smaller stocks are more likely to outperform, she writes.

    © 2008 Newsmax. All rights reserved


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    Re: $450 Oil in a decade?

    How does the Bakken Oil Reserve found in North Dakota, South Dakota, and Montana affect this?


    Last edited by HILLCYD; 06-02-2008 at 02:40 PM.

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    Re: $450 Oil in a decade?

    I don't get it. I thought there was an article recently that said $100 oil can't be sustained. And now $450 is a possibility.

    If demand has tampered recently at $150, I don't get how supply could continue up enough to get to $450 unless the oil was nearly depleted and became a rare commidity.


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    Re: $450 Oil in a decade?

    Supposedly we currently have a world demand for 87 million barrels/day with a supply of 83 mb/day. Obviously someone is concserving to close the gap.
    Oil may drop belowe $100 this summer, but by the end of decade expect $225-450 as India and China need for resources. It does not matter if we cut back 10%, the growing countries will more than take up the slack with their $5000 new cars. Buying/driving an SUV ewill become more of a luxury. Just look at the vehicles on the road in Europe and that may be our future.


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    Re: $450 Oil in a decade?

    I forget the guys name, but I listend to him being interviewed on Sqwak Box this morning. He was predicting that the per gallon gas price in the US will be $12 - $15 by 2012. Same reasons Wesly cited - the increased demand in China and India. He asserted that although we're finding plenty more oil domestically, the demand is growing quicker than production is.

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    Re: $450 Oil in a decade?

    I Dont think anyone has a clue what is going on just recently the head of OPEC said that oil should actually be back down to $60 a barrel. Because the supply catching up with the demand


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    Re: $450 Oil in a decade?

    Quote Originally Posted by cys_av8r View Post
    How does the Bakken Oil Reserve found in North Dakota, South Dakota, and Montana affect this?
    Good question. I would think at that price, tapping oil in previously hard to reach areas would become a viable alternative to OPEC. Anyone who knows more than myself care to comment?



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    Re: $450 Oil in a decade?

    Quote Originally Posted by CycloneTony View Post
    I Dont think anyone has a clue what is going on just recently the head of OPEC said that oil should actually be back down to $60 a barrel. Because the supply catching up with the demand
    I didn't hear that directly but you're the second guy I've talked to that said he did.

    I blame China and India for the price spike but I don't see $450 in 10 years. I just don't think the growth of industry in China and India is that signifigant. I wouldn't be surprised if oil leveled back off to $100 a barrel.



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    Re: $450 Oil in a decade?

    I will be drilling for oil in my basement if $450 is the case. I won't even check with the city of Bondurant.



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    Re: $450 Oil in a decade?

    Quote Originally Posted by mramseyISU View Post
    I didn't hear that directly but you're the second guy I've talked to that said he did.

    I blame China and India for the price spike but I don't see $450 in 10 years. I just don't think the growth of industry in China and India is that signifigant. I wouldn't be surprised if oil leveled back off to $100 a barrel.
    Ive been trying to find a link to that direct article but I cant pull up anything. I believe i heard it on Glenn Beck. I found something saying that OPEC believes that oil should be between $60-$70 dollars a barrel.

    Opec Cartel Answers Calls To Tackle Soaring Oil Prices Says Too High |Sky News|Politics


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    Re: $450 Oil in a decade?

    Quote Originally Posted by cys_av8r View Post
    How does the Bakken Oil Reserve found in North Dakota, South Dakota, and Montana affect this?
    The Oil in the Bakken Oil Reserve:

    1. is already being drilled and refined which puts it already a part of the equation so its not a new reserve that would increase our oil production.

    2. its Shale Oil which requires a longer and more tedious refining process unlike crude oil. So using it as a substitute for crude oil isn't as economically viable.



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    Re: $450 Oil in a decade?

    Quote Originally Posted by mojo View Post
    The Oil in the Bakken Oil Reserve:

    1. is already being drilled and refined which puts it already a part of the equation so its not a new reserve that would increase our oil production.

    2. its Shale Oil which requires a longer and more tedious refining process unlike crude oil. So the using it as a substitute for crude oil isn't as economically viable.
    This is very old information. It is not being heavily drilled right now and the amounts of oil that is there was recently upgraded to have enough oil to support the US for 42 years.



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    Re: $450 Oil in a decade?

    Quote Originally Posted by cys_av8r View Post
    This is very old information. It is not being heavily drilled right now and the amounts of oil that is there was recently upgraded to have enough oil to support the US for 42 years.
    No offense but I think perhaps you should check your information.

    From:
    USGS Release: 3 to 4.3 Billion Barrels of Technically Recoverable Oil Assessed in North Dakota and Montana’s Bakken Formation—25 Times More Than 1995 Estimate— (4/10/2008 2:25:36 PM)
    Released: 4/10/2008 2:25:36 PM

    "The USGS estimate of 3.0 to 4.3 billion barrels of technically recoverable oil has a mean value of 3.65 billion barrels. Scientists conducted detailed studies in stratigraphy and structural geology and the modeling of petroleum geochemistry. They also combined their findings with historical exploration and production analyses to determine the undiscovered, technically recoverable oil estimates"


    In a year, the U.S. consumes about 146 billion gallons (about 550 billion liters) of gasoline.



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    Re: $450 Oil in a decade?

    Quote Originally Posted by mojo View Post
    No offense but I think perhaps you should check your information.

    From:
    USGS Release: 3 to 4.3 Billion Barrels of Technically Recoverable Oil Assessed in North Dakota and Montana’s Bakken Formation—25 Times More Than 1995 Estimate— (4/10/2008 2:25:36 PM)
    Released: 4/10/2008 2:25:36 PM

    "The USGS estimate of 3.0 to 4.3 billion barrels of technically recoverable oil has a mean value of 3.65 billion barrels. Scientists conducted detailed studies in stratigraphy and structural geology and the modeling of petroleum geochemistry. They also combined their findings with historical exploration and production analyses to determine the undiscovered, technically recoverable oil estimates"


    In a year, the U.S. consumes about 146 billion gallons (about 550 billion liters) of gasoline.
    I will look for a link that is free information, but the one I have is one that I pay a subscription fee for and the information was updated a week ago, not on April 10. The number I saw was upgraded to 43 billion barrels based on new recovery technologies etc.



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    Re: $450 Oil in a decade?

    Considering the price of oil/barrel has nearly quadrupled in the last ten years, I can see it quadrupling again the next ten years.



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