Event Risk Oil: With crude getting near to prices seen last summer, I think it's time to do a Seinfeld and state the obvious: there's a strong risk that it could go higher, much higher. Russia, Venezuela, Iran, and Iraq are driving the production process and all are not producing as much as they could. Both Russia and Venezuela are taking control of their energy resources from big oil and chilling investment in production. From 1999, Venezuelan production is down 25% after Chavez took over.
With Mexico bleeding Pemex and not allowing foreign participation, all five countries mean oil is subject to lack of political will to get the stuff out of ground to sell it. I don't want to sound to Cassandra-ish, but this is hurricane season and we will likely get a least 1 or 2 that will be headed to the Gulf of Mexico. This means rigs and pipelines will be impacted. This means the market will anticipate damage if it's not doing it already. This means it's likely crude oil will see $85 to $100 a barrel with just a hurricane warning for the Gulf.
JOHANNESBURG (Business Day) -- Classic Business Day gets Jim Rogers - co-founder of the Quantum Fund with George Soros - on the line from the U.S. about the next leg in the commodities boom.
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