Global Economics

Tom Keene's Econo Chat: A Sell-Off Ahead for Oil?


Are we going to go to $100 a barrel? It seems to be a certitude out there.
There might be a surge above $100, but I suspect we've seen the highs, if not for the season, then for the year. The market is going to sell off and get softer.

What are you most focused on right now?
What gets my attention are the one-off factors that led to the rally in the last half of the year, like the French refinery strike. We've seen those factors dissipating. The winter was clearly a strong winter of demand because of weather, but that, too, is coming to an end.

Is peak oil discredited as a theory?
The peak oil guys are like the guys who didn't like the Cold War ending in the late 1980s. They keep looking for more evidence, but they are finding it harder and harder to define that peak oil is here. We're about to see North Dakota become a bigger producer of oil than Alaska. There is oil wherever people are putting holes in the ground.

What is the outlook for supply as we move into the new decade?
There is an incredible amount of offshore deepwater finds in the world. One that has been in the news lately is the Leviathan natural gas find off of Israel. Iraq is the other big factor. It looks already this year as if they're going to be adding 300,000 to 500,000 barrels a day, and the market hasn't quite adapted to that yet.

Keene hosts Bloomberg Surveillance 7-10 a.m. ET on 1130 AM in the New York metro area and nationally on SiriusXM 113.

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