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Baker Hughes Incorporated Message Board

  • leothesuperking leothesuperking Oct 11, 2006 10:10 AM Flag

    Dirt Cheap oil

    Really, Really Cheap Oil

    Christopher Helman
    Forbes.com

    Gasoline for $2? Michael Lynch says those good old days are just around the corner.
    Don't sell that SUV just yet. Oil, at a recent $66.50 a barrel, will fall to $45 by mid-2007 and could dip briefly into the 20s in 2008. Sometime next year you are going to see a $1.95 price on a gas pump.

    So says Michael C. Lynch, 51, president of Strategic Energy & Economic Research in Amherst, Mass. He swears he hasn't been inhaling fumes. His reasoning: New supply, coming online from all corners of the world, is more than ample to satisfy growth in demand and sufficient even to withstand an embargo against Iran, which produces 3.75 million barrels of oil a day. Lynch argues that the threat of disruptions--nuclear brinkmanship, war, terrorism, hurricanes, pipeline corrosion--has larded oil prices with a $20-a-barrel risk premium. As these perils recede, oil prices will fall.

    http://biz.yahoo.com/special/allbiz101106_article2.html

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