Wednesday, January 02, 2008
Predictions Prognostications & Puffery 2008: Oil
I wasn't going to start PP&P with a different subject but since oil futures hit $110/bbl this morning (02 Jan) it gets first billing.
High prices have sustained long enough that these contracts are starting to be reflected in consumer prices. What I see is consumer prices popping in the next few months at the same time the idea of recession gains credence. This will result in a gap down of both oil and GDP. Gas will hit $4 at least in California. National average peak $3.84. April? We will likely revisit those prices in the summer with refinery capacity issues the cause. Oil will probably peak less than $110 and in January. The low may break $50. Guessing $48.88. May and again in October?
Spoilers; Mexico gets religion and decides a weakened US is not in their interests would push prices to the low end.
But I have a lousy record on oil prices so I'd much rather hear from my betters. Go for it.