Wed Oct 19, 2005 9:52 PM IST OTTAWA (Reuters) - Consumers should brace for crude oil and natural gas prices possibly doubling or tripling this winter, Matthew Simmons, a best-selling author and oil-supply bear, said on Wednesday. "Prices are really cheap today and they need to go a lot higher, and they probably will go a lot higher," Simmons said in Ottawa. "I am very concerned, given the destructive damage done by (Hurricanes) Katrina and Rita, that the United States must be closer to starting to see significant product shortages than we've seen since 1979." Too much got destroyed and too little has been brought back on stream, the Houston-based analyst said. He also said that cold weather this winter could bring a very high risk of natural gas curtailment in the United States. "Either one of those events (oil product shortage or natural gas shortage) could send prices two to three times higher than they are today," he said after a speech in Ottawa. That could translate into natural gas prices of $40 per million British thermal units from more than $13 now, he said. Doubling or tripling crude would put it in the range of $125 to $190 per barrel. "Everyone keeps thinking there is a (price) ceiling...There is no ceiling," said Simmons, who wrote in his book "Twilight in the Desert" that Saudi oil output is at or near its peak. He said he has seen little sign that higher prices so far have done much to reduce consumption. Simmons said supplies of heating fuel oil were in okay shape, but could drain fast if the weather turned cold. Diesel is tight and shortages of jet fuel had caused some planes to be diverted from some airports. "It's going to be painful for people to get used to actually paying real money for a really valuable resource," he said. in.today.reuters.com/news...0156-1.xml
Well $190 might be pushing it a bit, but a $100+ by March is easily possible if demands exceeds supply in the way mentioned.
he might be getting popular from conspiracy types, but this will be ST and LT he will severely damage his reputation sticking his neck out like this. Remember Dow 36,000? That guy is cleaning office buildings now.
Actually this is great news. This will promote sentiment in the U.S. to make Iraq the 51st state. Free gasoline for all!! Whoopie!!!
IMHO it's not Oil but Natural Gas which will see a huge price jump this winter. I'm willing to bet that this winter will be much colder than average in the north.
Call me cynical, lots of variables are possible, and it could happen. The question I'd be asking is what is the probability of it happening? I believe not much of one. Without going into any detail myself, ponder the ramifications of such prices? What I'm interested in seeing is people who propagate such scenarios, is putting their money where their mouth is. If they're going to talk the talk, then walk the walk along with it. And why wouldn't you? Did he even half heartedly believe his own words, and acted upon them, the risk/reward would be most favorable. Matters not to me if oil runs to $100 or even higher. Even with diesel where I live selling for around $3.00 a gallon, it costs me less than $7.00 a week to drive. Sure it would impact other items, I'll survive it though. Oh, well this was good for laugh anyway! L8R Kelly
I can't see crude hitting even a $100, $50 is more likely to me. Look at the build up in inventories, hurricane season is over, except for the new one to hit Florida, I don't drink much OJ, sorry Floridians. $2 gas here we come, I hope, lol!