Weekend Edition: $100 Oil Imminent

Welcome to the weekend edition, a small collection of links to interesting personal finance related articles and economic news from around the web.

Can the global economy handle $100 oil? The answer would be “Yes it can” according to Kuwait’s Oil minister. The oil ministers of Iraq and Libya also think it’s a fair price while Qatar’s minister does not expect OPEC to increase its production at all in 2011. There’s still hope their stance might change during their next meeting in June.

In fact, Brent Spot is above $98 a barrel while Numex Crude is around $91.50. It looks like $100 oil will be a reality in the first half of 2011 bar any black swan economic events. Start getting used to what you’re paying at the pump right now and prepare yourselves psychologically for higher prices during the year.

If you are looking towards renewable energies as the solution to our reliance on fossil fuels, don’t put your hopes too high. According to Andrei Kapista, a member of the Russian Academy of Sciences, there is no good substitute today for hydrocarbons and nuclear energy. For him, thermonuclear fusion will be our savior; the problem is it will take decades to master this technology.

Economic roundup:

China hikes reserve requirements again

World Bank: China To Drive Asian Growth

Record Food Prices Could Trigger Riots, Protectionism

US Jobless Claims Rose More Than Forecast to 445,000 Last Week

China’s 2010 Auto Sales Top 18m Units

Weekly blog roundup:

Invest it Wisely: Going Carless: Does It Make Sense?

Dividend Monk: 6 Noteworthy Stocks with Yields Over 4%

Barbara Friedberg PF: INVEST IN BONDS NOW-at Your Own Peril

The Passive Income Earner: Do you want to know what investments make it into my RRSP account and why?

My Own Advisor: 2011 Personal Finance Goals

Canadian Finance Blog: What Is A Price To Book Ratio (P/B Ratio)

DIY Investor: What is a P/E ratio?

Boomer and Echo: RRSP And TFSA Portfolio Update

Money Smarts Blog: What Age Can You Open a TFSA?

101 Centavos Portolio Update and Allocation Strategy

Everyday Tips and Thoughts: The Snowball of Savings and Health Benefits From Eliminating Pop/Soda

Money Reasons: Is The Roth IRA In Danger?

Balance Junkie: 2011 What to Watch

Buck Inspire: Note to Newbies

Budgeting in The Fun Stuff: The Risks In Business – Do You Have What It Takes To Run A Business?

Enjoy the Weekend!


11 comments to Weekend Edition: $100 Oil Imminent

  • I think we will see $100 oil, but I’m not so sure the economy can handle it. I know my budget isn’t going to like it. ;)

    Thanks for including my article today!

  • $100 is bearable, but $150? Not without more pain.

    Hope you had a great weekend, Mich.

  • $100 oil?!?! :( Market is feeling pretty bullish so looks like the economy can. How does this affect your stock picks? Thanks for including me in your roundup!

  • Thanks for the mention Mich, I think $100 oil is inevitable again. In the meantime I’ll keep redeeming Air Miles for fuel gift certificates :)

  • […] This post was mentioned on Twitter by 2 Cents. 2 Cents said: RT @boomerandecho: RT @BeatingTheIndex Weekend Edition: $100 Oil Imminent http://t.co/sKkfEiL […]

  • Hello Mich, thanks for including my post on allocation in your round up. As always, you include some interesting economic links. Hydrocarbons are just too energy dense for any viable alternative to take their place anytime *soon*. Higher oil prices are very probable in the near future.
    I’d heard news about escalating food prices. Weirdly enough, it was about the price of onions in India.

  • Really $100 are not bearable. I still not able to understand why it soaring too high?? Can anyone explain it??

  • Mich

    @BJ, I think 2011 is the year prices will cross the 100$ threshold again, even if only temporarily. Contrary to my investments, my budget doesn’t like it either :)

    @IIW, $150 is way too soon, it would push us back into recession!

    @Buck, if the Canadian dollar keeps its parity to the USD and does not surpass it, higher oil equals higher profits which means higher valuations for these companies!

    @Echo, nice strategy, I usually remember my dividends from my energy companies when I want to feel better at paying more at the pump.

    @101, food prices will be going higher as a result, so onions might just be the start!

    @Shailender, demand growth for oil is robust because of India and China amongst other emerging economies.

  • Thanks for the mention (not the $100 oil forecast!). My worry is that it feeds into inflation. We are feeling pretty smug that we’ve reduced the oil input per unit of output and I think it could come back and get us in the states.
    Tight world oil supplies leave us vulnerable to an accident somewhere like the recent problems in Alaska.

  • I think we will see $100 oil this year. But I don’t think we will get to $150. I think the best play is oil companies. I think the refiners will get squeezed by consumers not wanting to pay higher prices.

  • Mich

    @DIY, When it comes to oil, black swan events are almost always positive (to the price of oil that is but not to the environment!)

    @Robert, I don’t wish to see $150 oil any time soon. But at $100 oil, my junior producers will be ecstatic!

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