Oil, where are prices going?

[TOM4CWB]

Charlie,

I got this off the Red River Newsletter;

"Global Oil Prices Will Decline -- The World Bank thinks global oil prices will likely fall to $56 a barrel next year and fall below $53 in 2008. World Bank economist Hans Timmer says oil prices will move closer to $40 a barrel in the long run."

Does anyone else have long term projections?

AS oil is now linked with biofuels and grain... what does this mean in terms of risk management?

[cowman]

Tough question TOM? Who knows? Wasn't that long ago that many pundits were saying $100...and no where to go but up?
Personally I doubt oil prices will go much lower. I don't see America shutting down...and America is a vorascious user of oil?
The bio fuel thing has thrown a monkey wrench into the equation...but realistically how much bio fuel can America(or the rest of the world for that matter?) produce? I read somewhere that if every arable acre in the USA was planted for bio-fuel the result would be 25% of the needed source?
There may be bumps on the road for bio fuel, but make no mistake....this thing isn't going away...and YES...there will be real advantages to agriculture! Be bold.

[cottonpicken]

Higher,much higher.100$ within a year.

[cottonpicken]

Just went and pulled up its chart, we should be 70 pretty quick.Lots of contracts being bought.

[cowman]

Well I sure wish the NG prices would stop crashing! Down to $7 this AM from $8.72 a week and a half ago!
Cottenpicken: Where to you see NG going? I know weather plays a big part in NG prices? Where do you see fertilizer prices going?

[wilagro]

cowman: "Well I sure wish the NG prices would stop crashing! Down to $7 this AM from $8.72 a week and a half ago!"

What side are you on cowman? NG should be less than $5. CNRL has stopped drilling for gas hoping for a price rise if a 'manufactured' shortage works...delaying gas pipelines...once again hoping for a 'manufactured' price rise.

The EUB of yesteryear had some teeth...now it sits there and lets industry call the shots.

I say "regulate" the whole darned bunch and force them to be honest.

[cottonpicken]

Cowman,you must have an interest in a well?
The volitility in n.gas has been UNBELIEVABLE up and down hundreds of percents in a few years.No wonder the armathon traders got smoked.Last i heard they picked up some cushy jobs with goldmans so i dont feel to sorry for them.
All the technical opinions are saying sell but i personally disagree.I think its heading higher as soon as this jan. but only when the us dollar tanks.
I am pleasantly surprised at how low fertilizer prices are but i cant imagine them staying that way.Higher gas prices and farmers with a little money should push prices very,very high in the next few years,hopefully not too soon.

[silverback]

Urea is currently being quoted at close to $450 in this area when it was $340 two weeks ago.

How high did it get when ng was $15??? (can't remember)

[cottonpicken]

$450 are you serious?

[cowman]

cottonpickin: I have some gas royalties. And believe it or not I would hope for some stability in the NG market.
Wilagro: At $5 the NG business just isn't sustainable or very poor returns for the industry? Without a doubt the crash in prices has slowed down exploration, especially in shallow gas and coalbed methane, but a good part of the slowdown is to bring production costs back in line? It was getting out of hand? The rigs are now going south...in a big way!
I'll tell you this: Although I benifit from production, I also am a consumer(like everyone else)and I realize the best cure for low prices is just that...low prices! And also the best cure for high prices...are high prices! Too low, supply dwindles? Too high demand dwindles? Now that is how all markets work...just wish we could even out the swings a bit?
If, as you say the price was regulated at $5...the supply would stop! Then what would you pay to heat your home or fertilize your crops? I don't think government regulation ever works, except on a very short term basis? And how do you regulate an export product?
Would you expect the gas producers to sell at a lower domestic price than the world market? Is that fair?