Posted by: David Welch on June 16, 2008
Enough is enough. During the long run up we’ve seen in oil and gas prices, more than a few oil executives and investment firms have predicted a rise in crude prices. Some of them were even based on actual market fundamentals. In many cases, either the executives selling the oil or investors who would benefit from more lucrative futures contracts have done the prognosticating. I’m sorry, but these forecasts are sounding fishier than Prince William Sound after the Exxon Valdez spilled its contents into the local ecology in 1989.
Witness OAO Gazprom CEO Alexei Miller, who on June 10 said oil prices could hit $250 a barrel. A June 16 story in Bloomberg added a cold dose of fear by saying that food prices would double, airlines would be nationalized and consumers would generally be miserable. The U.S. would go into deep recession, as would Europe, Japan and emerging-market economies. Good thing Miller’s forecast isn’t credible.
Am I the only who finds the price forecast coming from someone who stands to benefits from another price spike to be a bit dubious? Apparently not. A few economists and experts quoted later in the story say that prices won’t reach that level. But Tom Kloza, the chief oil analyst for the Oil Price Information Service, hits the nail on the head when he said, “It’s silly to take people with incredibly vested interests as having an unfettered, unbiased opinion.” Um, yeah. Thank you, Tom.