Five Points on Why Oil Will Go Much Higher - Beyond Fossil Fuel

Five Points on Why Oil Will Go Much Higher - Beyond Fossil Fuel: "The $50 per Barrel Oil Fast One - 10/17/08

There are many forecasting $50 per barrel oil while we go through this global slowdown, but how long will that last.

James Woolsey, former director of the CIA has an interesting thought about this. He says every 10 to 15 years the Saudis drop the price of oil. This causes a wipe out of most of the projects around the world that are exploring more domestic sources. The drop in oil also has an impact on the funding for alternative energy projects. After these projects are canceled, the Saudis slowly push the price of oil back up.

In the 1970s when the first oil crises happened, the U.S. was developing oil shale just as we are doing now. Around the world projects are going forward to find more oil, alternative energy and other forms of hydrocarbons like clean coal and tar sands. Today we see dropping oil prices from a high this year of $147 to today’s price of around $70, which is over a 50% drop in just a few months. Many oil companies start scaling back their projects when oil drops to $40-50 a barrel. Oil going below $50 kills many of these projects because they don’t see it cost effective in the midterm.

The Saudis are looking out for their best interest not ours. Are the Saudis really our friends or do they keep our oil fix going like a drug dealer does to an addict?

We will see $200 oil in the next 2 to 4 years. Are you ready? "