- Crude oil hits all-time high $126.20/barrel May 9 on dollar weakness, geopolitical concerns about Nigeria and Venezuela, and hedging against credit crisis
- New record obliterates not only nominal high but inflation-adjusted high of $100-111/b reached in 1981 (when Iran cut exports)
- Since 2001, dollar price of oil and gold moved in tandem, rising >267% and >239% respectively
- Verleger: Price rise due to US adding sweet crude to Strategic Petroleum Reserve and related option hedging
- Spiegel: Thanks to fuel subsidies, real price not high enough to cut demand
- Upside risks: low inventories, higher cost of production (due to labor shortages, credit crisis, extraction of unconventional sources), growing demand supported by fuel subsidies, $ weakness, speculation, hedging
- Spike risks: weather, geopolitics
- Downside risks: recession bets, end of refinery maintenance, increased non-OPEC supply and refinery capacity, lower demand in spring
- Consensus estimate for average WTI price in 2008 raised from $76/b to $87/b (UniCredit $100; BNP $89; Danske $83.5; Standard Chartered Bank $82; Natixis $67.7; Barclays $97.70)
- NYMEX futures predict oil prices to remain above $100/barrel in 2008
"The politicians' response should be, 'Get used to it,'" said Novogratz of the emerging energy crisis now fuelled by rising oil costs. He was particularly scathing of Hillary Clinton's gas tax holiday, which he called "the stupidest idea I ever heard."... http://blog.wired.com/wiredscience/2008/05/only-greentech.html
