Dust Off the Bike

BBC: Opec warns oil could reach $200

Opec, the oil producing cartel, has warned that the price of crude could keep rising to reach $200 a barrel.

Opec president Chakib Khelil blamed the falling value of the US dollar, which makes other assets, including oil, more attractive for foreign investors.

The dollar's decline has also made dollar-denominated assets such as oil and other commodities relatively cheap for some investors.

Isn't there an old quote about once the crap is out of the bull you can't get it back in.

Of course oil will cost $200 per barrel, the question is when.

Oil hit $90 per barrel on October 25, 2007 - source

Oil hit $100 per barrel on January 2, 2008 - source

So it took 69 days for oil to go from $90 to $100 per.

Oil almost hit $120 today 4-28. That means it took 117 days for oil to go from $100 to $120 per. That's a slightly faster pace than $90 to $100.

If oil keeps rising in cost at the present rate, it will cost $200 per in about 15 to 16 months. That would be July of 2009.

I know its a rather crude assessment. Clearly the oil barons have it charted out well into the future.

Exxon on the NYSE