I have a question for all economic analysis experts.  What will be the price of crude oil (per barrel) in the international market by the end of year 2009? When I checked this morning I found it was $ 71.35. It will be interesting to see how close you can come with your prediction after couple of months.

At least we got two predictions from Gabbar Singh and kingofmorons. Let's see whether more people will show their interest. As kingofmorons pointed out due to OPEC's strategies and discoveries of new reserves the price can stay pretty flat (but not sure!). However, Washington may switch its interest on natural gas in long run which is considered cleaner than oil but there are several technical and other uncertainities associated with it.

Can Natural Gas Break Our Oil Habit?

By Thomas K. Grose

Natural gas is the only fossil fuel capable of getting good press these days. Its fans regularly rhapsodize about its merits, calling it an extraordinary fuel that's cheap, domestically abundant, and clean. Well, cleaner than oil, at least. Meanwhile, everyone from Texas oilman T. Boone Pickens to the Sierra Club is promoting natural gas as the key that America needs to free itself from its century-long addiction to oil. After all, the nation's appetite for oil means that nearly 60 percent of the petroleum consumed each year must be imported, much of it from unstable or unsavory regimes in the Middle East, Africa, and Latin America.

Pickens, along with a growing number of groups, wants America to slash its oil consumption by making better use of natural gas. In theory, the plan sounds simple. Around 22 percent of the natural gas burned each year is used to generate electricity. If wind energy were substituted for gas at power plants, the freed-up natural gas could be used instead to fuel ground transportation systems, starting with diesel-burning fleet trucks and buses. Advocates say this plan could cut U.S. oil imports by up to 38 percent.

Yet if the nation makes the switch from oil to natural gas to run its vehicles, will it simply be trading one foreign-dependent fuel for another? The answer is, probably. But to what extent is very hard to say. "Welcome to uncertainty," says Gordon Kaufman, a professor emeritus and oil and gas expert at the Massachusetts Institute of Technology's Sloan School of Management.

http://www.usnews.com/articles/news/energy/2009/03/05/can-natural-gas-break-our-oil-habit.html?PageNr=1

Crude oil futures traders at commodities exchange, such as New York Mercantile Exchange (NYMEX or NY Merc) take into consideration a whole host of disparate factors (not excluding such odd non-market factors as the personal health of rulers of large oil producing countries, or prediction of higher than expected winter temperatures, hurricanes, labor strike, pipeline or tanker accidents, etc. in addition to the market supply and demand) in buying or selling crude oil futures, thus determining market prices of crude oil, and yet they seldom are able to come up with precise prediction. Their trade is speculative, rather than based on statistical prediction. They keep their eyes open for non-market triggers for market trends in crude oil supply and demand.

If you think stock market is volatile, commodities market is much more so. Barring tumultuous events in the Gulf or other oil-producing regions, like military attack on Iran by the U.S., the only safe prediction I can venture to make is that the crude oil prices aren’t likely to reach the highs of last year. Historically, the crude oil prices have jumped after such tumultuous events, as the chart in the link shows: http://www.wtrg.com/oil_graphs/oilprice1947.gif.

Simply put, it's hard to be precise to come up with a dollar figure, let alone down to two decimal cents.

So, I'll take that $71.35 prediction with much more than a pinch of salt… more like two sacks of it.

My $0.02

Ken Fisher is a rich, successful investor and a money manager... so he must be doing something right.

I agree with AP, fossil fuel is definitely going to be replaced by other alternatives in long run. However, future projections of petroleum production are always not true. Several people just use the total proven reserve in the world today and divide that number by the production rate. I don't konw why they overlook petroleum resources which are yet to convert into reserves. Many believe that we are in peak oil and petroleum will last only for 25-30 more years.

THE OIL RESERVE FALLACY
Proven reserves are not a measure of future supply

To begin with, one of the most revealing speeches about world oil reserves went unremarked in 2006. The head of the world's largest oil company, Saudi Aramco, said:

“We are looking at more than four and a half trillion barrels of potentially recoverable oil. That number translates into 140 years of oil at current rates of consumption, or to put it anther way, the world has only consumed about 18 percent of its conventional oil potential. That fact alone should discredit the argument that peak oil is imminent and put our minds at ease concerning future petrol supplies.”  

http://www.runet.edu/~wkovarik/oil/

US is certianly not in favor of hydro-electricity rather it can switch to natural gas as Washington is looking for cleaner energy. China, however, seems to be interested in developing more hydropower. Considered as the cleanest energy for long time hydroelectricity has also gained some environmental criticism. Some of these seem merely hypothetical, however, some have real impacts.

Hydropower Doesn't Count as Clean Energy

http://www.alternet.org/environment/64445/

Well, I think same with natural gas also. If we just look at Raju's data which show that the total reserve of natural gas in the world was 6,200 trillion cubic ft  on 2004 with the consumption rate of 100 trillion cubic ft./yr, we might think that the total volume of the gas should have been depleted by now. But if you look at the figure given by EIA , you will find that the reserve is increasing. The total reserve of the natural gas was 6,254 trillion cubic ft on Jan 1st 2009 with total consumption rate of 106 trillion cu. ft.

Actullay, we have huge volume of resources than the volume of reserve which is being converted into reserve continuously. There is too much development in technology that companies are extracting gas even from unconventional sources like shale which was once thought to be useless or only source rock. After discovery of methane coal gas, this is huge breakthrough in energy industry which is going to take that supply year far away from 60.

Again after getting couple of prediction on oil price by the end of year 2009, I am also going to put mine one, which I hope will stick around $72/bl.

Who says that we are in peak oil position right now and running out of it very soon?

There are discoveries of giant oil fields one after another.  Couple of weeks ago it was BP and coupld of months earlier Chevron also had announced discovery of another giant oil field.

http://www.chevron.com/News/Press/release/?id=2009-02-05

Geology tiger, i do understand what you are trying to say, ya fossil fuel might be increasing as per you say and as per your research but don't you think the consumption rate is also alarming every now and then. Do you know, number of chinese automobiles is increasing about 5 million per year, leaving rest of the world alone? We have 6.5 billion humans currently what about 75 million that are added every year. As per the research conducted by demographers, it projects a population between 8 and 10 billion by 2050. What do you think about the impact ?

Let me give you one example,

The United States with about 4.6 percent of world's population consumes about 25 percent of all oil. Do you know there are about 1.3 billion people in China alone. Its annual per capita GDP is about $4500 per year and is increasing. What do you think if Chinese alone, reached that stage where they match the American level of consumption? And please think about the rest of the world too!

Water sustains life, Energy sustains civilization!

Steve Sonnenberg,

Raju161,

You wrote that you are getting what I am trying to put here. And again I am not denying this fact that there is no other way than looking for alternative energy to supply the demand of energy in the world. But my point is that the way people are predicting that we are running out of petroleum energy pretty soon that in not true. Instead we are accumulating the volume of petroleum resources. However, this is not going to happen forever. So two things: We have to develop the alternative energy resources before we run out of petroleum resources. And also we have to utilize most advanced and sophisticated techonology (which has been already developed) in environmentally friendly way to extract possible petroleum resources.

China is not going to explode population anymore, and so does India. Moreover, China is showing more interest in developing hydropower and coal rather than exploring oil. However there will be certain increase in energy consumption by these two countries.

src: wikivisual.com

This is funny!!

Saudis Seek Payments for Any Drop in Oil Revenues

All right guys, i got one perk up video in my research involving intellects.Hope you all like this. If you all are really concerned about this important subject matter please watch the full video.

HERE IS THE LINK-

A Crude Awakening-The Oil Crash

http://www.videosift.com/video/A-Crude-Awakening-The-Oil-Crash-full-film

Once again price of crude oil from oil-price.net