That comes from EconMatters, a blog. In reviewing a mess of 2012 round-up pieces and 2013 here’s-what’s-gonna-happen items, this (to EleBlog) is the most outrageous single prognostication.
That doesn’t mean it’s wrong. But: If you don’t keep up on such things, a barrel of crude went for more than $96 as of Friday 1/25. This prediction would shave $30 off of that!!!
Here’s how a long rationale ended:
The last decade has been exemplified by higher energy prices, and with this came increased CAP EX investment, new technologies were refined, and North America has seen a rebirth in energy activity. It all started with natural gas, and now we are starting to experience this sea change in the Oil market.Prices in 2012 started addressing this dynamic change, but the real effects of this trend will start taking shape in 2013 as storage constraints start kicking in, demanding a re-pricing of the commodity.After all, no matter how much the Fed devalues the dollar, unlike Gold or Silver, you can only store so much Crude Oil, and with 700 million in the Strategic Reserves, another 400 million in US Reserves, how much do we really need to store in an increasingly energy independent North American Region?Economics will dictate that you can only build so much storage to avert the price drop from continual over supply, and right now the world produces more Oil than it consumes each day, and it has for the past 16 months, this trend will only get worse in 2013. So expect prices to finally start to address this over supply issue in the Oil Markets in 2013.
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