$20 a barrel?

[MrsCat 6]

A prominent, Calgary-based economist projects oil prices will continue to slide for at least the next six months and may drop as low as $20 a barrel.

Philip Verleger, a professor at the University of Calgary's Haskayne School of Business, said oil consumption is falling notably owing to the wobbly economy and a downturn in the auto industry.

"I think probably in the first quarter the average price will be below $50, it is possible if this recession is as bad as it is beginning to look it could be a lot lower than that," he said. "We could see something briefly in the twenties."

"On a year-over-year basis, GDP being down three or four per cent in the fourth quarter will lead to much lower oil consumption both in the United States and the rest of the world."

On Wednesday, light sweet crude for December delivery fell to $58.34 US a barrel on the New York Mercantile Exchange. Since July, oil prices have dropped by about 60 per cent from a high of $147.27 in July.

Verleger said a U.S. decision to hold back oil reserves raised the oil prices significantly.

"I calculate that consumers across the world paid a tax or transfer to oil producers of $1 trillion," he said. "I calculate the tax on the assumption that the price should have stayed around $70."

He said he expects oil prices over the next six months to largely hover around $50 a barrel.

http://www.cbc.ca/consumer/story/2008/11/1...l-verleger.html

[NickD 203]

A prominent, Calgary-based economist projects oil prices will continue to slide for at least the next six months and may drop as low as $20 a barrel.

Philip Verleger, a professor at the University of Calgary's Haskayne School of Business, said oil consumption is falling notably owing to the wobbly economy and a downturn in the auto industry.

"I think probably in the first quarter the average price will be below $50, it is possible if this recession is as bad as it is beginning to look it could be a lot lower than that," he said. "We could see something briefly in the twenties."

"On a year-over-year basis, GDP being down three or four per cent in the fourth quarter will lead to much lower oil consumption both in the United States and the rest of the world."

On Wednesday, light sweet crude for December delivery fell to $58.34 US a barrel on the New York Mercantile Exchange. Since July, oil prices have dropped by about 60 per cent from a high of $147.27 in July.

Verleger said a U.S. decision to hold back oil reserves raised the oil prices significantly.

"I calculate that consumers across the world paid a tax or transfer to oil producers of $1 trillion," he said. "I calculate the tax on the assumption that the price should have stayed around $70."

He said he expects oil prices over the next six months to largely hover around $50 a barrel.

http://www.cbc.ca/consumer/story/2008/11/1...l-verleger.html

They haven't dropped 60% at the pumps yet, one reason I heard is that the refineries, distribution, and gas stations can make a much higher profit.

[w¡n9Nµ7 §£@¥€r 123]

I filled up at $1.99 on the drive home

[Ban Hammer 13,644]

i'll wait till mawilson weighs in on this.

[mawilson 2,133]

A prominent, Calgary-based economist projects oil prices will continue to slide for at least the next six months and may drop as low as $20 a barrel.

Wow. I said $40, this guy is willing to go as low as $20?

[w¡n9Nµ7 §£@¥€r 123]

Do I hear $5?

[Staashi 371]

It went to $55 today.

[mawilson 2,133]

Do I hear $5?

Well it costs between $10 and $20 just to get the stuff out of the ground, so probably not.

[w¡n9Nµ7 §£@¥€r 123]

Do I hear $5?

Well it costs between $10 and $20 just to get the stuff out of the ground, so probably not.

How much can we reduce that to if labor costs became 0?

I'm thinking slave labor.

[mawilson 2,133]

Do I hear $5?

Well it costs between $10 and $20 just to get the stuff out of the ground, so probably not.

How much can we reduce that to if labor costs became 0?

I'm thinking slave labor.

The Saudis are way ahead of you man.

[w¡n9Nµ7 §£@¥€r 123]

Do I hear $5?

Well it costs between $10 and $20 just to get the stuff out of the ground, so probably not.

How much can we reduce that to if labor costs became 0?

I'm thinking slave labor.

The Saudis are way ahead of you man.

They keep migrant labors passports but they do pay them.

They are frankly much too generous!

[Jamie76 0]

Do I hear $5?

Well it costs between $10 and $20 just to get the stuff out of the ground, so probably not.

It costs way more than $10-$20 to pull oil out of the ground now, except for maybe a handful of oil fields.

[MrsCat 6]

Do I hear $5?

Well it costs between $10 and $20 just to get the stuff out of the ground, so probably not.

I don't know how much it costs to extract from Alberta, but its definitely more than $20/barrel. If the market does slip to $20 (however unlikely), Alberta wouldn't be extracting anything. Meaning the US is going to be relying much more heavily on non-North American sources. It shall be interesting to see none the less.

PS: Gas here is $3.15 and feels like a deal.

[natty bumppo 297]

at $20/bbl ... let's buy Canada

[Ban Hammer 13,644]

Do I hear $5?

Well it costs between $10 and $20 just to get the stuff out of the ground, so probably not.

How much can we reduce that to if labor costs became 0?

I'm thinking slave labor.