Oil price forecasts

Understanding Crude Oil. A model for dissecting crude oil

1 Comment

1 min read

Our summarized outlook was simple. Oil demand growth is likely to remain stunted given high prices and a number of major issues structurally which will remove any impetus for an oil price shock similar to the one that we witnessed in 2008. With additional supply coming back to the market from Iraq and Libya, Europe struggling with the fallout of the PIGS crisis and the slowdown in China the demand situation was not likely to be rosy.

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US Credit Rating Downgrade: Commodities price impact: Using gold to price oil

2 Comments

4 mins read

If we assume that when it comes to relative value Gold is doing a better job of predicting what something is really worth, how does that translate into cost? On average a barrel of oil costs about 0.0668 ounce of Gold. This puts fair value of a barrel of oil at about 114 using the average, at about 85 using the low over the last 3 years (including the dip last week) and at about 135 using the high of .08 over the same period.