Crude prices dipped again today, falling about $5 a barrel by mid-day in futures trading on the New York Mercantile
Exchange.
But don’t get excited, says Tom Kloza, chief oil analyst at the Oil Price Information Service or OPIS in Wall. N.J.
His comments sent to the Register:
ON THE LATEST OIL PRICES:
It ran up too far and too fast and is taking a breather. I wish it were a trend change, and regard most of the forecasts from investment banks and government agencies as wishful thinking or witchcraft (despite best efforts from competent EIA [U.S. Energy Information Administration] people). The simple line of thinking is that it is very rare for crude oil prices to crest in July - — the high tide period generally begins in August and ends around Columbus Day.
ON THE FUTURE:
Lots of economic woes and almost all of the forecasts are based on reasonable GDP growth both here and abroad. Unfortunately, we’ll probably go higher in August-October, and it’s more of a phenomenon that can be attributed to crowd behavior, rather than supply and demand statistics.
AT THE PUMP:
I think EIA’s prediction of $4.21 a gallon retail peak for gasoline nationwide is reasonable and well-conceived, but probably undershoots likely peak. They tend to project rather flat prices when the market almost always delivers an irregular heartbeat.
My guess is that we’ll peak somewhere in the $4.25-$4.75 gal range nationally, with less upside on the already inflated West Coast. But I tend to look for higher peak, and more of a sell-off, with the sell-off coming in the fourth quarter and tied to very shaky consumer behavior.
By the way, the EIA reported Monday the latest average national price of $4.165 and California price of $4.598.
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The mayor of Santa Ana thinks a better solution to cars that run on gas and hydrogen is a car that runs on electricity. Let me ask him (and anyone else who drives such a car) where does he think the electricity comes from? Does the power plant run on wind, or solar, or nuclear? Chances are, it gets some/most of its power from OIL! Does that make sense??