Crude oil rose to $90 a barrel, when will it change direction again?

Question

I wanna see <$70 a barrel again.

Answer 1

The only thing I see bringing oil to $90 is speculation. When it goes down, it will be hard and fast. No reason not to see oil at $70 in three months.

Answer 2

That will likely never happen again. Used to be oil was really only shared between US and Europe, while other countries used oil they also had central planning systems (such as Communism) or highly corrupt governments (India is a case in point) which suppressed transportation and trade. As countries like China and India come on-line in the global economy and become more "capitalist based" their need for oil will only increase as they look to transport more goods both within their borders as well as outside. Also these were for the most part very poor countries with a small middle class, the middle class will increase in these countries one of the first goods these new middle class individuals will buy is personal transport, car or motorcycle etc. You see the same phenomenon going on to a smaller extent in Vietnam, Cambodia and South America. Africa still represents a huge untapped oil-consumer-market that will eventually increase the demand for generations.
Many people are not guessing IF oil will break its inflation adjusted record of $100 a barrel in 1980 anymore they are starting to guess WHEN it will break $100 a barrel. Demand from countries like China and India, plus projected demand for decades to come form other parts of the world, have experts predicting oil at least $108. Of course experts are normally wrong, it should go higher.

Answer 3

As others have pointed out oil is imported so becomes more expensive as the dollar declines, and the price is effected by speculation. But both the value of the dollar and the speculation is influenced by our government's policies. The government deficit and the spending for the war in Iraq contributes to the decline in the dollar, and trouble in the middle east increases the probablity of a supply disruption, so both the war and threats against Iran increases the risk premium on speculation. Because of the growing demand for oil from developing nations, the price of oil is unlikely to every be cheap again, but it should fall significantly if the US government can get it act together. It would also help if the American people would save more, and drive fuel efficient cars,

Answer 4

When output exceeds demand.
Demand is on the rise, especially in developing economies. Some countries can change the supply as they see fit, like Saudi Arabia. But Saudia Arabia wants higher prices, so it is unlikely to increase supply dramatically. Although if the political situation in Iraq ever gets straightened out, Iraq might be able to increase supply.
I suspect with winter months coming on, we may see a decline in the price if the weather is on the warm side, but a couple blizzards, and oil will stay high (all other things equal, as if all other things ever stay equal).
Basically, it depends on so damn many factors (currency, demand, supply, geo-political stability, weather, etc.) that it pretty hard to predict what will happen next week, let alone next month....

Answer 5

As soon as the US finds other forms of energy, like Nuclear. I think every State should have at least 6 nuclear power plants that would cut are depends on rag head oil.

Answer 6

If the price of oil is going up, and the value of dollar is going down. Then is not the 'real' price of oil staying the same?

Should you not be asking when is the value of the dollar is going to go up.

Answer 7

Prices are never going back to what they was, now that the oil companies see that they can get a way with it. It will only soar! By the way dozen,t Bush come from a oil family?