Oil Should Be Around $10 a Barrel: Analyst

Put another way, he's saying oil would be $10 a barrel if we had a command-economy that could price it at $10 a barrel.

Great!

So what?

 

Correct on all points. But remember the rule of the mob: If you don't like current prices, blame the speculators. Even if half of them are short.

 

You are wrong in all sides

Futures, options of oil is settled every day not one day. If an option is expired yesterday, there is 10 more written today. So the notion of "When paper investors sell the current month to roll forward, all that's left are the physical buyers and sellers" is totally wrong, because there are new future calls, options happening every day.

I read somewhere that the paper demand is 11 times the physical demand in oil. Imagine what would happen if you ban paper demand. Oil should be much much cheaper than $70/brl

 

Russia also needs $70 oil to balance their budget.

 

“The economic recovery that began last year is beginning to be reflected in the rising earnings and improving credit quality,” FDIC Chairman Sheila Bair said in a statement.

____________________________________________________

According to the FDIC, the "Economy is in recovery mode", So, soon we should have GS reports coming out saying Oil to 200 by Dec...LOL

 

I was referring to expiration settlement, i.e. contract delivery. Not daily settlement.

 

World War 3 or an Earthquake of the magnitude 10 on the richter scale, will bring back Oil to $10 a Barrel. Remember the basic rule "demand and supply".

 

He is wrong. We should get paid for getting oil.