CEO Of World's Largest Energy Company Predicts Oil Will Hit $250 A Barrel

The chief executive of the world's largest energy company has issued the most dire warning yet about the soaring the price of oil, predicting that it will hit $250 per barrel "in the foreseeable future".

The forecast from Alexey Miller, the head of the Kremlin-owned gas giant Gazprom, would herald the arrival of £2-per-litre petrol and send shockwaves through the economy. His comments were the most stark to be expressed by an industry executive and come just days after the oil price registered its largest-ever single-day spike, hitting $139.12 per barrel last week amid fears that the world's faltering supply will be unable to keep up with demand.

Read the whole story here.

Comments

[swift_goat_pet_for_truth]

He thinks the dollar will lose THAT much value....

[MJD615]

Waiting for someone to start a revolution somewhere. This is really getting out of control.

[SouthpawSass]

In 1999, a gallon of gasoline cost an average of 92 cents a gallon. A barrel of oil cost just $11.

Funny how things change over time...

[StillAmused]

All of this, of course, is explained by the recent, barely-detectable reversal of the Earth's rotation (since it ISN'T explained by the biggest canard in recorded history, "supply and demand").

Trading oil in the futures market makes as much sense as trading the U.S. military, Social Security or local fire protection services.

Hope the traders can afford to gas up their Beamers at the end of a hard day on the floor, selling out their country.

[texastornado]

Let me try to expain what's happenin. You see the problem is this warp in space that Einstein was working on. That warp is so powerful that it warps just about everything . It even warps your way ot thinking. You see this space warp makes you think you don't have to work for a living. All you have to do is place a bet on things that are either going to go up or down in price. Either way it don't matter if it goes up or down you make a lot of money. It's called speculatin you see but it really doesn't work. Let me put it in simple terms. Let's say you live in a small rural town and have just one main drag going in and out of town, and let's say you decide to make it a one way street like the big cities. Hell once you drive on it you can't get back home. You see what I mean?

[SouthpawSass]

Hmmm, "warp in space"... That explains the vertigo, and here I thought it had something to do with menopause.

[StuCop]

shouldn't that headline read

"Energy CEO Drives Up Oil Prices With Dire Prediction to Fuel Futures Speculation - Pockets Huge Bonus for Effort"

with a sub headline reading

"really no supply and demand issues with oil"

which is true...demand actually rose at a quicker rate under President Clinton and we didn't have such huge spikes in prices. And people forget gas prices actually went down the first 2 years under Bush and didn't start their climb until 2003 when we invaded and occupied Iraq. Supply is fine...demand has grown at the same pace as always...nothing drastic has happened...the China/India consumption reasoning is a sham...

check eia dot doe dot gov ... especially the world oil balance report for the supply and demand numbers...you'll see there's no justification for such price spikes...

we are being gouged...plain and simple...

[fact finder]

StuCop you are 100% correct this whole mess is about greed and control. Keep using your head for some thing besides a hat rack.

[PierreLeClerke]

Miller is a classic Russian Oligarch. He is also a quick study of what has become the way of the unbridled market madness. Self fore filling prophesying and rumors can make big oil barons more extra billions over night. Miller just upped the ante to continue the acceleration of the filling of his personal coffers and siphoning ours. Our complisent wholly owned leadership is every bit a part of this same rape this Russian has jumped on the self serving band wagon of.

[EinChicago]

Also, lest we forget how the futures market worsks, it is a zero sum settlement model, meaning that traders make as much money if prices go down as if tehy go up. It's not like stocks where the rising prices is genreally better. If oil starts at $100, and goes up, the trader who had a long position settles at a $20 profit at close of trading. But if oil prices drop $20, teh trader with the short position makes the same$20 settlelment. So when this bubble pops, and it will, it will pop more violently and rapidly than the dot com or the housing bubbles combined because the same vultures that drove the price up can make just as much money by driving the price as low as possible. price doesn't matter to a futures trader; only volatility. And once oil reaches the breaking point at which upwards gains are only incremental (and it will, there is a breaking point at which demand will evaporate), then the traders have all teh incentive in teh world to bid that sucker down to teh ground to keep the gravy train rolling.

[outnow]

Good points, EinChicago. The weakness in the US dollar and the liquidity the Federal Reserve is pumping out will cause a bubble. The dollar is weak because of large trade deficits and budget deficits. The US is losing its role as a reserve currency role. Sellers are demanding more dollars are a hedge against its declining value and ultimate loss of reserve currency status. The prospect of an Israeli/US attack on Iran cannot be minimized for the potential for a threat to the supply, although the Saudis assure us that the supply is intact at the moment. There are insufficient storage facilities around the globe in that event.

The Democrats were unable to end the occupation of Iraq and unable to forestall threats on Iran. Real inflation, according to John Williams in his Shadow Statistics is 12 per cent. The long term interest rates are down lower than real inflation. Unemployment numbers are much higher than reported. Living standards are falling. There has been no real growth in the GDP in the 29th Century. Foreign countries will no longer lend to the US to finance its operations and the massive US trade deficit. Yes, the bubble will burst and hopefully soon before derivatives increase as against this bubble. Don't forget the London Loophole, either.

[EinChicago]

Declarations like this are actaully good. There are two inevitable earmarks of any bubble. (1) an ardent belief by the gullible and the self-interested that the bubble is not really abubble, but rather a fundamental market shift that will cause a new plateau of good times that will never end (i.e., the dot com bubble was never seen as a bubble rather as a paradigm changer where all business would be contracted over the web and the Internet craze would plateau and never end, the housing bubble likewise, and (2) ridiculous sky high predictions that keep reaching higher and higher and become the most strident/scary etc., right before the bubble bursts.

let's not forget that teh past 3 spikes, including the superspike last friday all happened in teh complete absence of any change in any fundamentals and were all driven by statements made by insiders (Goldman Sachs, primarily). It's reaching the point of a self-fulfilling prophecy where an insider makes a claim that the market will rise and the market rises in response to that claim.

[texastornado]

Bush said " shoot, with all the fire power our boys have all we have to do is Bop em Arabs upside the head and take all the erl we need", but something went wrong. Now we're stuck to the tar baby and can't shake loose. Hell let's try that again with Iran." Do it right this time boys".

[marko77]

Did this oil executive also mention that his profits will continue to skyrocket as oil consumers make his ilk richer and richer? I guess that's understood.

Our whole economic system is ass-backwards: when "the world" demands a product - be it oil or food - the price skyrockets and mega-profits fall into the hands of the few. And what about the vast majority?? Millions literally starve to death; millions more try to get by on less than $2 a day; and the everyone else's standard of living sinks - except for a few.

[CommentSense]

If this guy is right, maybe by then we Americans will have taken note and we will have begun our drawdown of oil consumption. Let's face it, we blew it. We've had our chance to improve our lives decades earlier, but living the American Dream of big homes, big cars and mass consumption of material goods is simply too enticing. Our sense of entitlement has caught up to us and now we are addicted to consuming on all levels and it is time to pay the piper. It's over $100 a barrel to stay, and we better get used to it. Maybe, just MAYBE- it is starting to seep in to our collective consciousness that we're in big trouble, and that even if those stories of Peak Oil are not true, then we need to start acting like it is. Countries such as China and India are where we were decades earlier, and they are not going to let up on their Dream now that they have a ticket to the big show.

Solar energy, hybrids, fuel cell, wind power and yes, even some nuke energy is our ticket to freedom, the American Dream 2.0. It is not going to come easy, and there needs to be some sacrifice. We owe it to our kids and our grandchildren.

[texastornado]

Yep the USofA is in Deep Deep Cow Poo.

[frappe]

And if oil hits anywhere near $250 a barrel, I predict a worldwide depression and and a world in complete chaos. (Then, of course, this could be just what "they" want.)

[KillTheMessenger]

If there was a worldwide recession, oil could not possibly hit $250/barrel. Who would be able to pay for it?

The high price of oil is actually a sign that the world is quite rich. Once it gets poorer, the price of oil will go down. Economics is all about equilibrium. We have to see where the purchasing power of the world and the price of oil meet. It could very well be in the $200+ range.

Having said that, even a world wide recession is not the same as chaos. Not even WWII would be characterized as chaos by those who lived through it. A time of insanity? Absolutely. But chaos for sure not. And if I personally had a choice whether I wanted to live through WWII (on any side) or be part of the world's shift to renewable energy, hey, I know what I want to be part of.

[texastornado]

Well I guess it's time to saddle up my horse. Whoa lightnin settle down. Anybody out thar want to buy a 350 ford pickup with extended cab?

[coyote4]

Drive it up to oil country Alberta Canada

[texastornado]

Much obliged, Coyote4. Might run that by the old cabeza for a bit. Alberta you say?

[TheShadow]

One thing many European countries have that we do not have is an efficient mass transit system. It varies from country to country, and it works. When we travel to Europe, my wife and I never rent a car (parking, and traffic are a hassle in the bigger cites) as the train system and inner city mass transit is excellent, and the major train stations usually are right downtown in the major cities. Cars in Europe are not looked upon the same way we Americans view our vehicles. It's a cultural thing, but that's something we have to learn as a society. Motorcycles, scooters, and bicycles also factor in larger numbers too over there.

We need to do some soul searching in this country regarding our transportation options, and have to face the reality that it may mean higher costs that all must bear for these changes.

[AnnArky]

Yeah, but in the meantime we'll all keep driving around like it's the end of the world.