oil guru says crude could hit $190 this winter, page-5

It is doubtful that oil will hit $190 a barrel. Perhaps $100 and that would require a severe winter, continued demand increases from China and the rest of the world, perhaps additional GoM storms or terrorist attacks in the middle east.

Supply / Demand puts it at around $45-50 the rest is speculators at work and supply uncertainty in Iraq.

Economics 101. At some point when prices get too high demand starts to fall. Demand is inelastic in the short term, but if it stays high in the medium term alternatives appear and fuel efficiency increases. Demand falls

Cars in China pay world prices for fuel. I was taxi ride for 30 minutes today and it cost me 6RMB = A1. At some point inefficient cars go off the road. Demand falls.

Supply also starts to increase. Look at oil companies - you cannot get a drilling rig for months they are so booked out. They are flush with cash and drilling everything they can and trying to get it into production - supply increases in the medium term.

The death of suburbia - heard the same story in the 1970's and 80's.

G