David,

Why do you think that I forecast that oil prices may rise to $100/bbl by
the end of 2005, over a year ago? I see that oil futures are well into
the upper 50s, and that means that those who buy futures today are
hoping to make a good profit when they sell in 6 months, including
accrued interests. So this means the purchasers expect the price to be
significantly higher that the current price - and they have factored in
potential losses in case of their crystal ball making a mistake. So,
this autumn, there is a probability of upper $60s, and perhaps my gut
feeling of over a year ago of $100/bbl won't be far wrong by when the
cold sets in.

$100/bbl will mean $3.50/USGal at the pump or more. Want to trade in
your SUV for a Prius? Do it now, before the market is flooded with
second-hand gas-guzzlers!

Brian

David Douthit wrote:
> Brian,
>
> The Federal Govenment is now forcasting an oil shortage the end of this
> year! (see below)
>
> David A. Douthit
>
> ===========================
>
>
>
> UPDATE: EIA Raises Forecasts For China, World Oil Demand
>
> (Updates to add increase to 1Q 2006 oil demand.)
>
> NEW YORK -(Dow Jones)- The federal Energy Information Administration on
> Thursday again raised its forecasts for Chinese oil demand, changes that
> boosted the outlook for world oil consumption as a whole.
>
> The upward revisions in the EIA's monthly oil-market outlook reinforce
> how demand - already so strong that it has pushed producers and refiners
> to the limits of their capacity - continues to grow robustly despite
> soaring prices.
>
> Acknowledging the pressure demand is putting on markets, the EIA, the
> statistics arm of the U.S. Department of Energy, now sees U.S. benchmark
> oil prices holding above $50 a barrel through 2006.
>
> "Several factors have contributed to the recent high crude oil prices
> and are likely to keep prices at or near present highs," the EIA wrote.
> "First, worldwide petroleum demand growth is projected to remain robust,
> despite high oil prices."
>
> While Chinese oil demand - like overall world consumption - isn't
> expected to grow as fast as it did in 2004, it is seen growing faster
> than expected early this year. The EIA revised its forecasts for Chinese
> oil demand in the second and fourth quarters up by 100,000 barrels a day
> in each case, to 7.4 million and 7.7 million barrels a day, respectively.
>
> The agency left its outlook for full-year Chinese demand and demand
> growth unchanged.
>
> In line with those increases, the EIA boosted its forecasts for second
> and third quarter world oil demand by 100,000 barrels a day, to 83.1
> million and 84.6 million barrels a day, respectively.
>
> The agency raised its forecast for demand in the fourth quarter by
> 200,000 barrels a day, to 86.8 million barrels a day. Demand in that
> quarter was already expected to test producers' ability to pump more
> oil. The new forecast leaves fourth quarter demand 700,000 barrels a day
> over projected supply.
>
> And the stress won't end this year. The EIA also raised its forecast for
> first quarter 2006 oil demand by 300,000 barrels a day, to 86.9 million
> barrels a day, slightly pulling up the outlook for demand growth that year.
>
>
>
>
> "Projections for 2005 and 2006 call for worldwide growth averaging 2.2
> million barrels per day, or 2.6 percent, per year, down from the
> 3.4-percent growth in 2004," the EIA said.
>
> Weaker than expected demand for gasoline in the U.S. this summer was the
> exception to the EIA's upward revision. The EIA now sees gasoline demand
> of 9.34 million barrels a day in the third quarter, 80,000 barrels a day
> below its previous forecast. The change pulled the forecast for overall
> U.S. oil demand in the quarter down by 30,000 barrels a day, to 20.95
> million barrels a day.
>
> Nevertheless, growth in gasoline demand will be strong enough to push
> prices to new records, with the EIA forecasting summer prices of $2.28 a
> gallon on average from April to September, up 38 cents from last summer.
>
> "Despite high prices, demand is expected to continue to rise due to the
> increasing number of drivers and vehicles and increasing per-capita
> vehicle miles traveled," the EIA said.
>
> -By Andrew Dowell, Dow Jones Newswires; 201-938-4430; andrew.dowell@
> dowjones.com
>
> DowJones Newswire
>