Index will move on Crude Oil Price.

August 18, 2008


Prices have more than doubled in the past 12 months. The International Energy Agency (IEA) is revising future price estimates upwards as we speak.

Indeed, oil is not a hot commodity… it’s THE hot commodity.

And it looks like it’s going to remain that way for some time.

Long-time oilman and current chairman of BP Capital Management, T. Boone Pickens, was recently asked in a 60 Minutes interview when he thought we’d see $1.50 a gallon at the pump again. “We won’t ever see $1.50 a gallon again,” said Pickens. “No, that’s gone.”

It’s tough to disagree.

Emerging markets are rapidly industrializing, and the world demand for oil is expected to increase 54% over the next 25 years, according to the U.S. Energy Information Agency (EIA).

Crude oil prices have been rising steadily over the past three years, and there is fear of potential disruptions in supply. This has created an environment where oil over $110 a barrel is the norm and $150 oil is hardly unimaginable.

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