http://www.cnbc.com/id/38915139 The price of a barrel of oil would be closer to $10 if the commodity wasn't traded as an investment instrument, given the record-high levels of U.S. oil inventories, Peter Beutel, president of Cameron Hanover, told CNBC Monday. "I honestly think that if there were no investors using oil as an asset that the price of oil right now would be $10 or $15 or $18, but it wouldn't be anywhere near where it is," Beutel said. "We have so much oil right now, more than we've had in 27 years. Why is it 27 years? Because that's how far our records go back. It's probably the most in 50 or 100 years," he added. Part of the reason the price of oil is currently above $74 [US@CL.1 74.72 -0.45 (-0.6%) ] a barrel is because of a belief in the economic recovery, Beutel said. Comments by Federal Reserve Chairman Ben Bernanke over the weekend gave the commodity a boost as he signalled a willingness to support the fragile economic recovery with additional policy measures. From a historical perspective, Beutel pointed out that the current level of inventories is even higher than when the price of oil was below $20 a barrel. "We've got 50 million barrels of crude more than we had two years ago. We have 176 million of distillate," Beutel said. "When I started in the business back in 1980 we used to think to ourselves: "Gee, we would love it if we had 140 million barrels of distillates to start the winter." Not all market watchers agree that the price of oil should or will go lower. Jonathan Barratt, managing director at Commodity Broking Services, told CNBC that he thinks oil will rise to between $82 and $85 a barrel.
Totally agree with him, as I said years ago during the oil bubble that it was all speculation driving the market place and had nothing to do with supply and demand. Oil prices are still overvalued given the outlook of this economy and where its heading, oil should easily be trading under $40 a barrel.
The Saudis need 70$ oil to balance the budget. 10$ oil would be a considerable threat to US security.
"Oil Should Be Around $10 a Barrel !!!" - that's what i was trying to explain to the Korean gas station attendant as i was beating the crap out of him earlier this morning. Rennick Out
Oil is trading at 70/80 thanks to the FED and the US dollar devaluation. Anyway, The US need crude oil at 70/80 bucks because We made a very big investment in Iraq (over a trillion dollar), and to see the benefits of our investment we need a weak dollar and a expensive oil.
I tell you, this guy just get no respect (Matthew Simmons; Peak Oil)...body is barely cold, dying in a hot tub just three weeks ago http://www.bloomberg.com/news/2010-...nker-peak-oil-theory-advocate-dies-at-67.html Simmons, July 16, 2008: "oil is more likely to hit $200 per barrel than drop to $50 over the next six months".
"...Simmons, 67, died in an accidental drowning at his home in Maine, local officials said...." "accidental" "murderous" maybe?