The question is simple. Are oil prices an issue of low supply and high demand? Or are the energy speculators manipulating the market via sinister means and driving oil prices to line their wallets?
To find out answers Fast Money spoke with Robert Hirsch, Senior Energy Advisor at Management Information Services Inc. He used to run oil exploration for Exxon.
Are speculators to blame?
It doesn’t seem to me speculators are playing a major role, says Hirsch. It seems like a supply and demand situation.
How much higher do you see oil going?
Fundamentally we’re on a production plateau, replies Hirsch. And the demand is robust in countries with a lot of expansion such as China, India and the Middle East. We could be in trouble.
Will the reserves in Brazil and Iraq ease the problem?
We have to wait and see what drilling actually produces and how much is actually there, says Hirsch. Considering the time it will take to bring that oil in – I think we’re in trouble and it’s inescapable.
> Energy Outrage: Ethanol
> Energy Outrage: Iraq
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