Consultant on CNBC: Oil should be $10-$18 a barrel now

[Newsjock]

Source: CNBC

The price of a barrel of oil would be closer to $10 if the commodity wasn't traded as an investment instrument, given the record-high levels of U.S. oil inventories, Peter Beutel, president of Cameron Hanover, told CNBC Monday.

"I honestly think that if there were no investors using oil as an asset that the price of oil right now would be $10 or $15 or $18, but it wouldn't be anywhere near where it is," Beutel said.

"We have so much oil right now, more than we've had in 27 years. Why is it 27 years? Because that's how far our records go back. It's probably the most in 50 or 100 years," he added.

... From a historical perspective, Beutel pointed out that the current level of inventories is even higher than when the price of oil was below $20 a barrel.

Read more: http://finance.yahoo.com/news/Oil-Should-Be-Around-10-a-cnbc-3612643166.html?x=0&sec=topStories&pos=3&asset=&ccode=

[LaurenG]

1. So the rich get richer.

K & R

[Indydem]

2. What an idiot.

If oil were $10-$18 a barrel, gas would be cheap.

People would buy big SUV's, drive more aggressively and conserve less.

Demand goes up, inventories go down, price goes up.

High fuel cost is good for the planet and bad for polluting douchebags.

[rfranklin]

3. It's still too cheap in the USA...

We should raise gasoline tax to match prices in Canada or Europe. The money could be used to repair some of our again infrastructure.

[Dappleganger]

4. How is high fuel costs good for the planet

if it's only lining the pockets of the corpoRATS??

[Indydem]

21. Whoop te do!

So what if oil execs make a few more dollars. Unbridled consumerism is DESTROYING OUR PLANET.

We need $5/gallon gas to make people start thinking about green communities and smarter choices.

[taterguy]

27. It'll take more than $5 gas to have people make substantive change

All $5 a gallon gas would do is give people less disposable income, which leads to unemployment since people are spending less money.

Gas would have to be about $20 a gallon before people considered moving to a more convenient location or switching vehicles.

[hughee99]

6. I have no idea if what he's saying is accurate, but from strictly price standpoint

if inventories are higher than they've been in 20+ years, one would expect the price to be far lower than it is now. Certainly there are some benefits to higher prices, but just because demand goes up doesn't mean inventories go down if production out-paces demand.

[Renew Deal]

14. You're proposing strangling the poor in the name of conservation.

Aside from driving up the prices of goods, the high price of oil hasn't done anything to really reduce driving.

[Indydem]

20. Bull. Hummer is OUT OF BUSINESS. Case closed. n/t

[Renew Deal]

22. So is Saturn

:shrug:

[Indydem]

24. Saturn was no greenie.

Their last year of operation, half of their offerings were SUV's which got less than 20mpg combined.

[joeglow3]

28. Doesn't change the fact you are screwing the poor for the sake of conservation.

[Canuckistanian]

5. They should make owners of oil TAKE DELIVERY

When you consider that a tanker full of oil can be sold and resold without most of it's owners ever expected to actually MOVE or SELL the stuff - it's not hard to see why oil prices are so high.

[Subdivisions]

7. And it might well be that low if it hadn't been in decline since 2005.

But the plain fact is, as a resource becomes more scarce, the price goes up. And oil production has been delcining at a rate of 1.5% YoY since 2005.

[laughingliberal]

9. As I understand it, demand is also down. The expected rise in demand from China did not materialize

and consumption is down in the US.

[Subdivisions]

12. Demand has NOT been down since 2005. Demand only began to

falter just two years ago. So, explain why oil production began to decline at a time when it was most in demand in all of history.

And, btw, it began to decline despite the highest prices per barrel in history, leading to a high of $147/barrel in July of 2008.

[laughingliberal]

17. I was speaking of demand being down right now. I didn't dispute production declined.

I said demand is down which, in a sane world, would drive prices down.

You seem a little testy.

[Subdivisions]

19. Not testy at all. Thank you for clarifying your statement. And you are right,

in a sane world prices would go down. But the world is not sane.

[n2doc]

16. See graph

[laughingliberal]

18. I understand. But it is also my understanding that demand over the summer was no where what

they expected it would be.

[BootinUp]

23. lol, nonsense nt

[yellerpup]

8. This is GWB's true legacy.

He filled every inch of storage space he could when the price of oil was at a record and he didn't even try to 'jawbone' them down for a better price. :kick:

[laughingliberal]

10. +1 nt

[louis-t]

11. "Open the spigot! Open the spigot!"

:woohoo:

[louis-t]

13. It wouldn't be $10-18 for long.

Usage would certainly go up.

[n2doc]

15. With interest rates low, it costs little to hold oil

And there is still demand in China.

Funny how these guys complain, this is their "free market" at work.

[Javaman]

25. another right wing tool that doesn't take into account the subsidies that the oil corps get...

remove the subsidies and the price would sky rocket.

another moron feeding from the deep pockets of the oil industry.

And considering the US dollar is now oil based instead of gold, trying to disassociate us from investing in oil as a commodity is just pure unadulterated ignorance.

prepare for this morons stupidity to be the new talking point of the right wing know nothings.

[Dappleganger]

26. +10000