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Goldman has their neck way out there. They're the only major firm looking for higher prices. They've said they could see $100/b. Everyone else seems to be looking for $35/b.


Not true.

WASHINGTON (Reuters) - China's growing thirst for petroleum, tight supplies and little spare production capacity will keep oil prices volatile through 2030, with the possibility of spikes as high as $100 a barrel, the International Monetary Fund said Thursday.

Odac warns of global shortage of oil after 2007
Valerie Darroch, Sunday Herald
THE world faces a global oil supply shortage after 2007, which would threaten economic growth, according to new research by the Oil Depletion Analysis Centre (Odac) which says that not enough major new fields will come on stream to offset declines .

The Bank of Montreal
"The combination of the news that there's no new Saudi Light coming on stream for the next seven years plus the 27% projected decline from existing fields means Hubbert's Peak has arrived in Saudi Arabia," says Coxe, referring to data compiled by the International Energy Association's (IEA) August 2004 monthly report.

Problematic effects

The Canadian bank is the latest in a line of oil opinion-makers to speak out about.

Others, notably banker Matt Simmons and the head of the Association for the study of Peak Oil (Aspo), Colin Campbell, have called into question the validity of its stated reserves, supposedly 258 billion barrels.

Some say Gharwar may have been damaged by poor management

If Gharwar, the world's biggest field, is seen to be "in decline", as Coxe says, the effects could be problematic. Markets could panic, forcing prices up, creating shortages and profoundly affecting the world economy.

A titanic struggle between supply and demand
Apr 6th 2005
From The Economist Global Agenda

Oil hit another new high this week and OPEC promised to raise its production by another 500,000 barrels per day to help ease the pain. But with capacity tight and demand continuing to grow, high oil prices may be here to stay

There are many more, but I get tired of cutting and pasting. There is a growing consensus that high oil prices are here to stay and that they will get much higher in the next few years. Remember, it was only March of last year that both OPEC and most of the market analysts were predicting $20 - $28/barrel by October, 2004. It finally hit $50/barrel in Oct. The market is tight right now with most major non OPEC producers pumping full tilt with no excess capacity and only Saudi Arabia reporting any spare capacity on the OPEC side. Oil traders seem to be saying to the Saudis, "Bullcrap. Show us your cards." The Saudi's have so far replied by saying, "no." As long as there is concern that supply will have a tough time meeting demand prices will continue to rise and there is more than ample reason to have concern.
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