Oil is now over $80 per barrel. In January, while many other analysts were predicting $40 to $60 oil, Michael J. Economides, a professor at the Cullen College of Engineering, University of Houston, predicted that oil would soon be back at $100.
In an op-ed column written for Maritime-Executive, Cullen says that while there are obvious and real underlying reasons for the escalating oil prices, political agendas and news headlines have ruled the price of oil since at least 2004. "There was no real rational economic reason for oil to reach almost $150 (which for people with short memories may seem to have happened last century - it happened in July 2008) nor was there any reason for below-$40 oil, which happened right after the economic crisis hit last fall," he writes.
In this article, Cullen analyzes why the regimes of many oil producing and exporting nations "love $100 oil" and notes that "they have little incentive to shoot themselves in the foot by increasing production." They want oil revenue "not for technological, and even business re-investment and long-term resource management, but to affect other internal political and geopolitical aims," he writes.
"Oil is on its way to $100, and it will not stop there," Cullen concludes.
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