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Wednesday, August 15, 2007

GASOLINE PRICES……..LONG TERM PERSPECTIVE

We are seeing a slight hike in oil prices, about to $73 a barrel….this due to fears of a major storm strike in the Gulf of Mexico petrochemical & oil facilities.

But these are probably short-term rises….what prediction can we make on a long term…say 2-3 years ?

I’d say a very, very steep hike.

The reasons are:

The crisis in the Middle East show no signs of declining. In fact, they are escalating. The relation of quite a few oil consuming countries with Iran is deteriorating.

Then, there’s a nexus between some OPEC countries like Venezuela, Iran with China & other consumers…..this would cause a lot of jitters in Western & Far East capitalist countries.

Gasoline consumption of developing countries like China & India are increasing exponentially.

Russia has overtaken the U.S. to be the second largest oil producer….and Gazprom is . Russia is flexing its muscles, and seems to be on a trade agreement with anti-capitalist allies.

And lastly, the MOST IMPORTANT FACT :

THE GLOBE IS RUNNING OUT OF OIL………some predict we have oil only till 2050….and by 2015 there would be a shortfall of 25%

It is a corollary of the Hubbert Peak of Oil Production.

So, my prediction is…..fear will drive the oil prices sky high.

SO THIS MIGHT BE JUST THE RIGHT TIME TO BUY THOSE OIL STOCKS…

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