Oil will rise to at least USD$93.40/bbl
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Oil will rise to at least USD$93.40/bbl
Reading the current research reports from investment houses' in NYC, it seems that we haven’t come close to the peak yet. A quote from The Goldman Sachs Group, Inc’s latest oil forecast analysis;
“Current oil prices are still far below the all-time highs reached in the early 1980s, when WTI reached $39.40/bbl, the equivalent of $93.40/bbl in prices of Q12005. In otherwords, oil prices would need to rise another 50% from the current $64/bbl to compare with those of the early 1980s.”
GS have been spot on forecasting the crude price over the last 12 months, and other firms reckon over USD$100/bbl by the end of the year.
Just wondering how the LCC’s with no yield seating (ie no First or J) can survive these prices. I guess it was dream days for the LCC in 2001 when prices were $17.50/bbl and they could fly plenty of beer drinking, thong wearing, yobos around. I suspect the said customers wont fly to Hamilton Is. to eat fish and chips if ticket prices rise to the level needed when oil climbs above 80/bbl???
Taking all this into account whats the forecast for bottom dweller airlines like Jet* and VB?? Who’s mortgaging the house to buy stock???
“Current oil prices are still far below the all-time highs reached in the early 1980s, when WTI reached $39.40/bbl, the equivalent of $93.40/bbl in prices of Q12005. In otherwords, oil prices would need to rise another 50% from the current $64/bbl to compare with those of the early 1980s.”
GS have been spot on forecasting the crude price over the last 12 months, and other firms reckon over USD$100/bbl by the end of the year.
Just wondering how the LCC’s with no yield seating (ie no First or J) can survive these prices. I guess it was dream days for the LCC in 2001 when prices were $17.50/bbl and they could fly plenty of beer drinking, thong wearing, yobos around. I suspect the said customers wont fly to Hamilton Is. to eat fish and chips if ticket prices rise to the level needed when oil climbs above 80/bbl???
Taking all this into account whats the forecast for bottom dweller airlines like Jet* and VB?? Who’s mortgaging the house to buy stock???
Perhaps it's just my comprehension skills, but where in that passage does it say that oil prices ARE FORECAST to rise to $93.40 a barrel?
As I read it, they are merely making the observation that current levels aren't anywhere near the high (in comparative terms) of previous oil price spikes, when the price reached the EQUIVALENT of $93.40.
The trouble with the current oil situation is that it is in the best interests of a lot of firms to talk up the oil price & make rash predictions, most likely because they are looking to profit financially from such a situation. A such, why would they try to get people to analyse the situation rationally...?
As I read it, they are merely making the observation that current levels aren't anywhere near the high (in comparative terms) of previous oil price spikes, when the price reached the EQUIVALENT of $93.40.
The trouble with the current oil situation is that it is in the best interests of a lot of firms to talk up the oil price & make rash predictions, most likely because they are looking to profit financially from such a situation. A such, why would they try to get people to analyse the situation rationally...?
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A barrel of crude oil = 159 liters.
Crude oil is quoted today at US$65.80 per barrel = Aus$86.07 per barrel = Aus$0.54 per liter
April 28, 2005.
“The forecast came as BP unveiled record first quarter profits of US$5.5bn - a 29 per cent increase on the same period last year - thanks to the surging oil price.
Shareholders received more than US$4bn in dividend payments and share buy-backs.”
That equates to US$22 Billion (Aus$28.8 Billion) full year profit.
Eventually certain industries will talk either alternate energy or greater efficiency, demand will relax = stabilisation in oil prices - oil company yields will become more realistic.
Interestingly, few western economies appear to have suffered significantly due to higher oil prices.
But that's only my two cents worth - and I've been wrong before!
Woomera
Crude oil is quoted today at US$65.80 per barrel = Aus$86.07 per barrel = Aus$0.54 per liter
April 28, 2005.
“The forecast came as BP unveiled record first quarter profits of US$5.5bn - a 29 per cent increase on the same period last year - thanks to the surging oil price.
Shareholders received more than US$4bn in dividend payments and share buy-backs.”
That equates to US$22 Billion (Aus$28.8 Billion) full year profit.
Eventually certain industries will talk either alternate energy or greater efficiency, demand will relax = stabilisation in oil prices - oil company yields will become more realistic.
Interestingly, few western economies appear to have suffered significantly due to higher oil prices.
But that's only my two cents worth - and I've been wrong before!
Woomera
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Demand is exceeding supply, to get your share you must pay more, with relatively new players like China increasing their share than demand is continuing to outstrip supply.
The cost of extraction is not increasing to any great extent, yet, so the oil companies are doing very well thank you.
The big problem is that it can only get worse. Not for the oil companies yet, but eventually they will have nothing to sell, and who will want their shares then.
Prospector
The cost of extraction is not increasing to any great extent, yet, so the oil companies are doing very well thank you.
The big problem is that it can only get worse. Not for the oil companies yet, but eventually they will have nothing to sell, and who will want their shares then.
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Branson would need 1.5 billion usd and a time frame of 5 to 7 years to setup. just in time for the next trough in the price of jet fuel. I don't think he will be in the oil business.
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He would buy an existing refinery I think and get the right crude suppliers on his side. Stay away from OPEC and their record profits at our expense.
Sheep.
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My 2c:
OPEC arent setting these prices. Futures traders (who got burn't last FY on oil) are. They are talking it up - that is their job after all. And being all in their early 20's they know their stuff.
Whilst supply issues are of concern in the long term (Peak Oil etc.), the current bottleneck is refinery and rig output. Have a look at the guys working on the old refineries and engineering the rigs - they are all at, past or close to retirement age. The oil companies took their profits in the early 90's (for their shareholders and execs) but did not invest in new plant or train new engineers. The results are now coming to fruition.
BTW - does this sound different to any other company these days?!
OPEC arent setting these prices. Futures traders (who got burn't last FY on oil) are. They are talking it up - that is their job after all. And being all in their early 20's they know their stuff.
Whilst supply issues are of concern in the long term (Peak Oil etc.), the current bottleneck is refinery and rig output. Have a look at the guys working on the old refineries and engineering the rigs - they are all at, past or close to retirement age. The oil companies took their profits in the early 90's (for their shareholders and execs) but did not invest in new plant or train new engineers. The results are now coming to fruition.
BTW - does this sound different to any other company these days?!
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Subject: RE: Shortage of Oil?
A lot of people can't understand how we came to have an oil shortage
here in
our country. Well, there's a very simple answer. Nobody bothered to
check
the oil. We just didn't know we were getting low. The reason for that is
purely geographical.
Our oil is located in Bass Strait, off the coast of Western Australia in
the
Indian sea, the Timor Sea and the Mereenie oil fields in Central
Australia.
Our dipsticks are located in Canberra.
A lot of people can't understand how we came to have an oil shortage
here in
our country. Well, there's a very simple answer. Nobody bothered to
check
the oil. We just didn't know we were getting low. The reason for that is
purely geographical.
Our oil is located in Bass Strait, off the coast of Western Australia in
the
Indian sea, the Timor Sea and the Mereenie oil fields in Central
Australia.
Our dipsticks are located in Canberra.
