Trader Warns That $300 Oil Is Coming Yet Investors Are Shunning Alt Fuels
By John O'Dell March 4, 2009
If you don't like what you see in the rearview mirror -- $145 a barrel oil
and gasoline that last July topped $4 a gallon -- then you won't like what commodities trader Kevin Kerr sees up ahead when the global economy eventually gets back into gear.
Oil prices will start accelerating, he warns.
"Any economic recovery results in higher energy prices -- it's elementary," Kerr writes in Dow Jones' MarketWatch.com.
"That means $300 crude oil could be one year away or three years away, but certainly not much more."
In the lessons-not-learned department, Kerr writes, "It's disappointing that during this lull in energy prices, more immediate action isn't being taken to stave off the rapid return of even higher energy prices."
There's been "almost no progress on the march to alternatives," according to Kerr. "The global investment engine has ground to a halt. With oil prices at these levels and the market in tatters, the last place investors want to put their money is in the alternative energy space."
Kerr's observations came just hours before General Motors reported that its February sales tumbled 53 percent from a year earlier. Ford and Toyota sales were down 48 percent and 40 percent, respectively.
Plummeting sales have dried up revenue and that means little to spend on developing vehicles that can use alternative fuels and power plants.
Oil prices, meanwhile, have dipped below $33 twice in the past three months and inventories are nearing record highs.
We're seriously hoping he's overstating things, but Kerr says this is just the lull before a pretty violent storm.
Greg Johnson, Contributor
LEAVE A COMMENT
Tell that to the short-sighted Congress Republicans who keep fighting Obama's energy plan (and yet have no alernative solutions)......and the majority of edmunds.com editors who think that hybrids don't make much sense.
Kevin Kerr must be a wealthy man to propose such investment. With the economy in shambles, where is the money going to come from? Does he propose increasing taxes for you and me? Does he propose stealing money from social security or from the federal highway fund? Does he propose invading an oil-rich middle-eastern country and becoming a member of OPEC? Let's be realistic here. There's only a limited supply of money, and too many other ways to spend it.
Greenpony, just to clarify, would you agree there isn't any social security money to be stolen? There is no pot of money being invested and protected. Social Security has been run as a Ponzi scheme.
ADD A COMMENT