I wonder if there are any other energy nerds on p5s.

In grad school I've become really into energy and am hoping to go into the energy industry after I graduate. In one of my classes we're having a contest where each student has to predict what the price of uranium, LNG, and a barrel of oil will be on December 5th. We also have to write up a one page analysis on why we think the price of oil will be what we predicted.

Today a barrel of WTI is at $88.74 and I predicted it to be at $101.00 on 12/5. What are everyones thoughts?

I cited a few things. Winter in the Northern Hemisphere accounting for heating oil demand to keep houses warm. the USGS just slashed their estimates of undiscovered Marcellus Shale (the stuff we get liquefied natural gas from) by 80%, which means LNG is probably going to be a lot less relevant in the US over the next decade than people originally thought. Nuclear power after Fukushima is coming under attack and supposedly 30 nuclear plants around the world in seismic zones are going to be shut down, not to mention some countries like Germany are completely phasing out nuclear power. These countries are going to start relying on renewables like solar and wind for power, but these sources are intermittent at best and so theyre going to have to rely on oil to help deal with this. Lastly I thinkkkk global instability in terms of the financial markets and arab spring unrest are going to continue to have a strong affect. Libya and Egypt account for only 3% of the world's oil production, yet right at the beginning of the Egyptian revolution and Libyan civil war, oil prices skyrocketed. they've since come down but I think because of all these factors the price of oil is gonna take a big jump again.

it would be cool if everyone could predict what they think the price of a barrel of WTI will be on 12/5/11 and then look back in 3 months to see who was closest. wug thoughts ot?

o/u on replies to this thread is 4

Bout $3.50

The spread between WTI and Brent is quite absurd and I can't explain it, I'm a pretty big noob when it comes to this stuff. I think a lot of it will hinge on how the world views Obama's job plan and the Eurozone crisis. If the BRIC nations end up buying Euro bonds like they're currently discussing, it may be the huge confidence boost that WTI needs to get back to even with Brent. I suppose global instability in terms of financial markets will lead to low oil prices. Lets just hope for another huge civil war in the Middle East so we can see $100/barrel again.

What do you think it will be on 12/5 dolphin? take a guess.

stacking: can you be more specific?

i work in transportation so i follow the national diesel average weekly. after the fluctuations the past few years, no fucking clue what it will be doing EOY but its been strangely static the past 2 mos or so

My price target would be 75. But I don't have a lot of confidence in it.

Dollar strengthening has kept oil from going higher, IMO. gold too. The swiss had the last real "true currency" and now they're trying to devalue because the populace is up in arms over the cost of food etc. They're actually driving to other countries to shop because the EURO has collapsed and the swiss franc has been seen as a safe haven

There's been some speculation that the reserves in the middle east aren't as high as they're stating. Don't know how much truth there is to this but ... if big oil is spending billions on exploring for and extracting oil from non traditional (more costly) sources such as deep ocean drilling and oil sands, it seems to make sense. I don't know the exact numbers but i believe traditional oil production can be extremely profitable to companies at around $40 / barrel, where as oil sands and deep sea drilling needs around $65/barrel to remain profitable. Why would they spend so much money on these more expensive ventures if oil was still so plentiful?

I think the price will float between $80 and $95 a barrel from what most analysts have been saying.

I'm going with sax's guess, simply because fundamentally oil should be on a steady climb, but the number yesterday was trash. The macro environment is going to play the biggest role in the pricing, imo. If the euro and dollar reached parody? pretty cheap. if demand plummets in the states? the same. if Israel gets shelled? pretty pricey. China's growth? There are a million different angles that could make it run. I think I'd actually be pretty pleasantly surprised by $100/bbl WTI by the end of the year.

It would mean that I would owe saxman a pizza, tho.

 

Originally Posted by cdmalgee

It would mean that I would owe saxman a pizza, tho.

lol - watching the fluctuations on GE is making me dizzy. Since we made that bet it's changed directions pretty much every day. Still not sure who is going to end up paying for pizza. Fun stuff.

btw - i've said for a while i don't think there will be a QE3. Seems like uncle Benny wants to wash his hands of the market fluctations and leave it up to congress to make changes to stabalize things (ie. tax reform / incentives, mortgage gaurantees / loans, etc).

Kinda sad that we still rely on oil so much in this day and age

everything today is so rushed. everyone driving around and flying and getting email on their phones. why can't we go back to simpler days when people worked dawn til dusk and hoped they grew enough food to last the winter?

 

Originally Posted by norcaljeff

everything today is so rushed. everyone driving around and flying and getting email on their phones. why can't we go back to simpler days when people worked dawn til dusk and hoped they grew enough food to last the winter?

youd have to grow a lot of food to maintain your current physique
:)

 

Originally Posted by Arctic

Bout $3.50

if you didnt put this as your answer, youre going to fail

Price of oil will never go below $75 again for any extended period of time

follow? I lead.

lol, I "google images" "I lead" and this was the first pic.

 

Originally Posted by EyeKnows

follow? I lead.

lol, I "google images" "I lead" and this was the first pic.

id hit it