As Yogi would say, it’s like déjà vu all over again.
The Evening Standard, June 18, 2008:
The oil minister who headed the Saudi Arabian oil industry from 1962 to1986 and became a household name during the oil crises of the 1970s, Ahmed Zaki Yamani, today predicted prices could double to $300 a barrel.
Reuters, April 5, 2011:
Oil prices could rocket to $200- $300 a barrel if the world’s top crude exporter Saudi Arabia is hit by serious political unrest, former Saudi oil minister Sheikh Zaki Yamani told Reuters on Tuesday.
Oil might be headed to $200, $300 or $? for that matter. Why not? After all, $300 Brent crude oil translates into consumer diesel prices of only around €2.34/L in Germany and £2.76/L in the U.K. What’s the big deal?
Bear in mind, Yamani’s forecast is predicated on the conjunction if, as in… if wishes were horses then beggars would ride.
To this effect, if Saudi Arabia is not hit by serious political unrest,
In the meantime, the bull’s go-to scapegoat, China, appears unwilling at the moment to indulge Wall Street’s wildest fantasies. On Tuesday, the People’s Bank of China unexpectedly raised interest rates. The one-year lending rate goes up by 25 bps to 6.31% as of today.
This is the fourth interest rate hike since October that is meant to collar inflation. So far it has not worked. However, when it finally does (as illustrated today’s issue of The Schork Report ) it will likely have a deleterious impact on oil prices.
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Stephen Schork is the Editor of The Schork Report and has more than 17 years experience in physical commodity and derivatives trading, risk systems modeling and structured commodity finance.