Oil Prices Will Go Up

May/14/2009 17:56PM
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The stars are aligned to push crude oil prices up. It has gained 21% since April 21st. There have been draws in oil and gasoline inventories, Imports are down, and production has dropped off. Domestic gasoline inventories are down. This is why domestic gasoline prices have gone up.

Some guy on the Kudlow Report last Friday predicted the crude price will be $300 within the next 12 months. That would be $9.50 gasoline by next summer.

Keep in mind while this is completely out of the scope of my beliefs, it will go up. That is if the global economy goes up. The only reason it’s down is the global economy.

So we do nothing as a country to prepare for higher crude prices. Obama’s little windmills will do a much as those propellers on kid’s beanies would do. Gore’s little solar panels will give no relief. The politicians have run out of scapegoats. The decisions that continue to be made by Washington on energy will insure the economic recovery never happens until the energy problem is solved.

So buckle down for a long siege. If we started today and pushed every kind of domestic energy options we have to the max totally ignoring global warming, it will take 3 long years to make an impact. The odds of that happening are slim and none, unless gasoline would hit $9.50 a gallon. If this were to happen Obama, Gore, Pelosi, Reid, and every nutty tree hugger in this country would instantly become radioactive. Then, and only then, would the work of fixing the problem begin.

So, the good news is the oil prices will only rise slowly as the global economy stays down. As all the efforts all the countries are making to fix the economic problem begins to bear fruit, the ugly crude price will return and destroy it all.

The blame game and finger pointing will start again. But, there is no place for the politicians who sold the green energy program to hide.

Eventually, reality and common sense will take over and we will begin to fix the problem. But, the economy will be tepid at best for several years until results begin to happen.

Memories are short. The crude oil price started the recession. The housing crisis pushed it through the roof. When the dust settles the fundamentals that kicked off the energy run up to $140 a barrel will return. World wide demand is greater than production.

The Chinese are making deals all over the world to lock up crude oil. Recently they are in Brazil. We, on the other hand, are busy dreaming away about green energy that will never happen.

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