Analysts expecting $135 a barrel Oil by end of 2012 (that would mean gas @ $5.40 a gallon)

http://hosted.ap.org/dynamic/stories/O/OIL_PRICES?SITE=AP

Goldman Sachs expects benchmark West Texas Intermediate crude to hit $135 per barrel by the end of 2012. Morgan Stanley said Brent will average $120 per barrel this year, while J.P. Morgan thinks Brent will be $130 per barrel in the third quarter.

"They're very cautious about selling after the big boys come out and start pumping up" the price," oil analyst Jim Ritterbusch said.

In addition Barclays Capital said crude demand could pick up this summer as power shortages in China worsen. An extended drought is reducing hydroelectric sources and forcing authorities to turn to coal and diesel to run generators.

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..... the additional cost paid for this oil will come out of our hoped for economic growth.

Not even fundamentals anymore, they're just overcome with greed.

It's called demand destruction: when the price becomes too high, people don't buy.

The ENTIRE WORLD is in a Depression, for god's sake. Nobody's going to be buying oil at those prices. And the Depression isn't going away any time soon. China isn't going to fill the oilman's stockings with loot, any more than anyone else.

http://omrpublic.iea.org/

Oil production has been climbing, but not as fast as demand has been climbing, and price hasn't put a big dent in it yet. Note in the graphs (and in the accompanying article, if you click through to it) that demand has been exceeding supply for much of this year.

which is what is driving oil prices, not true demand.

In theory its a figure usually given in barrels of oil consumed or used rather than stored in inventory.

The volume of oil in storage is also closely tracked, but I hadn't ever really thought about whether some of the oil reported as end-use might actually be stocked away somewhere, waiting for the price to go back up to be resold. I'm sure it could happen, but given the total volumes (in tens of millions of barrels every day), it probably isn't enough to affect the figures much.

Traffic does seem lighter. Any higher and it would be very bad for the economy.
Driving home yesterday behind a brand new huge Ford 450 wondering what they pays for gas. Yikes!

Huh?

thus driving up spot prices and futures prices. (oil inventories affect short term price moves more than production rates)


http://my.firedoglake.com/ruthcalvo/2010/06/26/oil-hoarding/


In 2008, oil was being stored too. In Fortune magazine, economics writer John Birger wrote in December of 2008;

"‘What’s different now is the structure of the futures market, which is giving big investors an incentive to buy and hold huge sums of crude. Specifically, the November 2009 price of oil is considerably higher ($12 a barrel higher, to be precise) than the spot price – a scenario futures traders call a "contango" market. (The opposite scenario – spot prices higher than futures prices – is known as "backwardation.")

"The steepening of the contango has opened up carry-trade arbitrage opportunities that are slow to be closed due to constrained credit conditions," Goldman Sachs wrote in a recent research report. Translation: this is a great time for investors to be hoarding oil."

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What fuckwits they are.