Lehman Bros. Report: Oil Bust in the Cards

MoneyNews.Com ^ | April 25, 2008

[TennTuxedo]

Is $120 oil even real? Not if you ask the Saudis, or even Lehman Bros. The investment bank’s oil expert said this week that the oil boom is due to bust. Economic growth across the globe will slow just as new refineries kick in, raising supply.

[cookcounty]

Whatever happened to the big North Dakota Bakken field announcement???

[pierrem15]

My understanding is that the Saudis have considerable excess production capacity: look for that to come on-line to help McCain and stick the Iranians and Chavez in the shorts a few months before the election.

[Yardstick]

So why didn’t the old standby “exponential” make the cut?

[Revolting cat!]

It’s different this time and I’ll tell you why.

[familyop]

"Is $120 oil even real?"

Of course it's not real. [It's over $125 now.] We've seen the wishful thinking behind that propaganda since before the 1st of December, when the "recession" was started with an early lock against hiring. The "recession" didn't work. It didn't bring freight fuel down or the dollar up.

Freight fuel is going up. So are prices of Asian products. It's time to start manufacturing more at home, to stop discouraging engineering education for Americans and to start allowing domestic competition again.

[familyop]

"It will be interesting to see if OPEC recognizes that they are about to slaughter the golden calf."

No, they aren't. The countries that our business and political leaders have built up (China, India,...) will continue to buy all of the oil that OPEC can provide in order to produce real wealth (by making things).

[Right Wing Assault]

So why didn’t the old standby “exponential” make the cut?

As long as you have a negative exponent on 'e', it will work, too.

[montag813]

and in this corner... Goldman Sachs:

Who predicted $100/barrel in 2005. I will take GS over Lehman any day.

[Yardstick]

I gotcha.

[Osage Orange]

I just wonder if all the oil speculators are also Opec members?

Nope....and I can very much guarantee that.

[Osage Orange]

Good point....and anyone who was persuaded by that news bite...was toasted in the short term.

Trends are what they are..............

[TennTuxedo]

Freight fuel is going up. So are prices of Asian products. It's time to start manufacturing more at home, to stop discouraging engineering education for Americans and to start allowing domestic competition again.

You are absolutely right. Expect any product that we get from Asia to have a 25% or higher increase in cost due to the price of oil. Its already happening in the furniture industry.

[Osage Orange]

I’ll take Boone Pickens over them both............

[tcrlaf]

“Whatever happened to the big North Dakota Bakken field announcement???”

It’ll be tied up in Enviro lawsuits for the next 20 years, with taxpayers yet again making Envirolawyers filthy stinkin’ rich.

[Spouting Horn]

John McCain is against new drilling and new refineries.

Why he says? Because “I’m an environmentalist!”

[tcrlaf]

THE LOW DOLLAR EFFECT:

The lower dollar reduces the profitability of producing overseas, which means some manufacturing COMES HOME. (ie. Plasma TV production in Fort Wayne, Indiana)

This works ONLY as long as Democrats don’t ruin the trend by yet again raising the taxes and costs on employers.
(is.”Carbon Taxes” and “Universal” rationed Healthcare)

[tcrlaf]

“Why he says? Because “I’m an environmentalist!””

It’s easier for many spineless politicians to go along, than be demonized as “CHILD KILLER!!” by the Left for daring to stand against them.

[familyop]

"You are absolutely right. Expect any product that we get from Asia to have a 25% or higher increase in cost due to the price of oil. Its already happening in the furniture industry."

...and also due to rising consumer demand in some very populated parts of Asia. When consumers there pay more, we pay more.

[coloradan]

I think you mean “exporter.”

[adm5]

I’m no T. Boone Pickens or anything, but I am giving oil a price target of $50-$60/bbl within 2 years.

DUG is your friend for those wanting an easy way to short crude.