What a difference 20 years make in crude oil prices
Matthew R. Simmons, Chairman and CEO, Simmons & Company International, Houston
I began writing World Oil's annual Crude Oil Outlook article on New Years Day, 13 years ago, when prices had just fallen below $14/bbl for the first time since 1986. At the time, conventional wisdom was certain that the world market had entered a new paradigm of ample, diverse supply. This was deemed to have removed a $10 "fear premium" that had been a structural aspect of pricing since the 1973 Oil Shock. Hence, most observers felt that prices ought to trade within a $10-to-$13/bbl range for the foreseeable future, bringing prices back to levels only briefly experienced in 1986, when a genuine supply overhang existed.
( Full story here )
I began writing World Oil's annual Crude Oil Outlook article on New Years Day, 13 years ago, when prices had just fallen below $14/bbl for the first time since 1986. At the time, conventional wisdom was certain that the world market had entered a new paradigm of ample, diverse supply. This was deemed to have removed a $10 "fear premium" that had been a structural aspect of pricing since the 1973 Oil Shock. Hence, most observers felt that prices ought to trade within a $10-to-$13/bbl range for the foreseeable future, bringing prices back to levels only briefly experienced in 1986, when a genuine supply overhang existed.
( Full story here )
posted by Oil Shock at 3/04/2006 12:34:00 AM
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