2010 Crude Futures Trading at Record Prices 2006-01-24 By Luke Burgess
Dear Energy Daily reader:
Are you bullish on oil in the long-term? Well, you should be.
Crude pulled back a bit today as investors took profits after front-month oil rose for three straight trading sessions. A nasty cold front that is brutalizing Europe, and dropped temperatures in Moscow to the lowest in 50 years, pushed crude prices higher over the past few days.
This afternoon NYMEX oil for March delivery was trading at $67.75 per barrel, down $0.35 from today's opening
But prices are likely to resume their climb as Iran's nuclear ambitions and militant attacks in Nigeria continue to be a threat to oil supplies.
Yesterday Iran warned that if it was referred to the U.N. Security Council, which has the power to impose sanctions, the rogue country would immediately forge ahead with developing a full-scale uranium enrichment program.
Meanwhile, Nigerian militants are holding four expatriate oil workers and have threatened to launch rocket attacks on crude installations in the Niger Delta.
The short-term market seems to be taking a bullish view right now.
And the long-term trend? Super-Bullish!!!
Investors are now paying record prices for crude oil futures for delivery roughly five years from now.
NYMEX futures contracts for December 2010 ended last week at a record price of $64.45 a barrel. Today's 2010 prices are holding steady. Take a look.
The fact that investors are prepared to buy oil at these prices is a clear indication that the rally in oil prices is not going to go bust any time soon.
The market shows little signs of relief in sight from the high energy prices that have recently been pinching the pockets of consumers worldwide.
In September 2000 oil prices rose to $37.20 a barrel on concerns of a potential shortfall in inventories. While $37 oil is cheap by today's standard, it was a good 25% higher than the year's average.
Back then the future contracts for 2003 delivery traded around $20. This was a sign of confidence that oil would be available at lower prices.
But today's record prices for futures at the end of this decade and beyond reflect the views of those, including the editors of Energy Daily, who believe that global oil output has peaked and is declining as older fields are exhausted.
Sustained high prices for oil to be delivered by the end of 2010 should serve as a long-term bullish signal to investors such as yourself.
The International Energy Agency estimates that oil demand will grow to 92 million barrels a day in 2010, up from last year's daily consumption of 83.3 million barrels. By the way, using 92 million barrels a day is equal to 46 full supertankers!
Supplies from OPEC and elsewhere will be severely stretched to meet that demand.
Over 1.5 trillion barrels of oil equivalent have been produces since Edwin Drake drilled the world's first oil well in 1859.
The IEA says that the world will need roughly that same amount to meet demand in the next 25 years alone.
The ultimate reality is this: global supply will not going grow as fast as global demand.
And unfortunately there's no easy way around. The world has used oil to paint ourselves into a corner.
Now as you know the editors of Energy Daily do not subscribe madcap rantings of doomsday cults, or apocalyptic prophecy sects.
But there's one thing that's certain, and two's for sure: Peak oil is upon us. And you, me, and everyone we know better start preparing for the worst.
Hi Mick,have very little knowledge of t/a but am presently learning.Is there a description of the W formation somewhere or better yet what should be expected next.
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