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Oil Prices: Oil could hit $160 next week

Posted April 3, 2008

“In the last 58 years, according to Worldwatch estimates (based on sources such as BP and the International Energy Agency), year-on-year demand for oil has grown every year, except for two brief periods.” — Dominic Frisby

by Dominic Frisby

Baltimore and London – (TFN): The oil price could hit $160 a barrel as soon as next week.

At least, that’s what ‘Zapata’ George Blake, the Texan oil analyst, reckons.

‘Zapata’ George has a habit of making bold calls that often seem to be proved right. I interviewed him on my radio show last week (and you can listen to the complete interview). He thinks there’s an imminent supply squeeze ahead, which will cause the oil price to spike. Daily consumption is exceeding daily production, he says. There are oil shortages now.

But first, let me dispel a couple of common myths about oil.

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Oil Prices Myth #1: Supply and demand

Cobblers.

In the last 58 years, according to Worldwatch estimates (based on sources such as BP and the International Energy Agency), year-on-year demand for oil has grown every year, except for two brief periods. Between 1973 and 1975, amidst a global energy crisis, global demand decreased annually by a whopping 0.01%. And between 1979 and 1984 consumption growth leveled, the biggest annual decrease being in 79-80 - down a devastating 0.04%.

If you factor natural gas into the equation, these ‘declines’ were even smaller. I’m going to write it in bold letters: Demand for oil will not fall by any significant amount, even if the US goes into recession. Read on to learn whether oil supplies will be able to meet the current demand.

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Posted by Dominic Frisby · Filed Under Oil and Energy 

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