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$100 a barrel? I thought it was a given. By the end of the year? You betcha. I believe “Duh” was the comment I made to Sharon E. when we discussed whether traders would need a "Benjamin" to get a barrel of crude by the end of the year. Now, I may very well be eating my words.
The turning point came when Enbridge’s pipeline linking the U.S. to Canada’s vast oil reserves exploded. Traders jumped in and sold that rally. You knew something had changed. The smart money thought the spike would be the best opportunity to cash in, at least for the near term. They weren’t scrambling to hoard every available barrel of black gold, as you might expect when the artery to one of our biggest exporters is suddenly blocked.
Has anything really changed as we’ve slid back down below $90? Fundamentally? Or have the “risks” so often mentioned in connection with oil’s risk-premium just not panned out?
I spoke to my source inside the Saudi Oil Ministry last week, and he told me, the Kingdom is pumping out more oil than ever. It will top 9 million barrels a day as Saudi’s Oil Minister Ali Naimi walks into this week’s OPEC meeting. And why not? They are reaping a record reward. But he also pointed out there isn’t a single customer who can’t get all the oil they can haul away in a tanker.
And that begs the question, where is this gap between supply and demand we heard about on our march to $100? Our own government forecasted that demand around the world would exceed supply in the fourth quarter of 2007 by somewhere between 1.5 to 2 million barrels a day. It’s Boone Pickens favorite stat anytime I ask him why oil is so damn pricey: “Just do the math, Melissa.”
So as December gets underway, I’m asking, who are those customers left wanting? If you know one, or are one yourself, write to me. I’d love to chat: .
Questions? Comments? energysource@cnbc.com
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Data is a real-time snapshot *Data is delayed at least 15 minutes