The man who heads the Federal government unit that handles oil price forecasts says oil will be above $100 for a long, long time, certainly into 2009.
"You've got this global market still operating at very low spare (oil production) capacity, all of which is in Saudi Arabia," Guy Caruso, head of the Energy Information Administration said at a Reuters-sponsored meeting.
Mr. Caruso may be a bit late in telling the markets something that almost all experts have figured out already.
It is now fairly clear that oil demand in China, India and much of the rest of the developing world is not going to drop. They need crude to fuel their rapidly expanding economies. At the same time, older oil fields in places like Mexico and Russia are not producing at the levels that they did just a few years ago. OPEC is not raising production, perhaps because it likes the income from high oil too much.
It is a shame that government experts have estimates that are so far behind the times, but anyone with a brain is not listening to information that is months past what the real world already knows.
Douglas A. McIntyre is an editor at 247wallst.com and author of the Tens Stocks Under $10 letter.
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