$100 Oil - Here We Go… Again
February 20, 2008 – 1:55 pm
From TheOilDrum.com
The price for West Texas Intermediate (WTI) oil closed above $100 for the first time on February 19, 2008. “Rising oil prices have been giving a clear signal of pending shortages for over five years now,” according to TheOilDrum.com. By ignoring this signal, world leaders are steering the world toward an energy disaster characterized by shortages, high energy prices, inflation, civil unrest and famine.
The $100 a barrel closing price is a sign that times will never be the same again. “The world is entering a new era. In this new era, the supply of energy will dominate the political landscape in a way that is not being recognized by any of the presidential candidates,” according to TheOilDrum.com.
I still have a hard time imagining why investors are shocked that oil has traded north of $100/barrel. Sure the idea of $100 a barrel isn’t too settling when you consider how many products are petroleum based (and the economic implications of triple-digit oil), but these escalated prices were to be expected in this volatile market.
With the fantastic energy bull run of 2007, one had to expect that record highs were going to be made. And with a sideways pattern since November, oil tested those highs again most recently. With the turbulence in the energy complex, OPEC’s death grip on supply and a garden variety of geopolitical tensions in oil producing countries, i’d say a breakout of the sideways pattern is in order, but it may take a few more tests at the $100 level for these very real prices to “sink-in.” Long calls on (USO) anyone?
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