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JPMorgan Sees ‘Stratospheric’ $380 Oil on Worst-Case Russian Cut

8 points by notlukesky 4y ago

Flatcircle 4y ago
If oil gets anywhere close to that it'd be absolutely criminal for American politicians to cow tow to any environmentalists that want to curb oil production/efficiency around the US. Oil prices that high would result in countless deaths from unintended consequences. Would be horribly tragic.
fuzzfactor 4y ago
$380 would obviously be an artificially high price, so it would not be able to remain there forever, and is so high that an actual crash would be likely to occur later on. Oil seems to be quite artificially high already, just not of this predicted magnitude. Back in 1981 the devastation of the OPEC Oil Embargo of the 1970's was still being strongly felt, it had been quite a number of years but many people were still fairly well off and had been able to adjust, even to the continued runaway inflation. Offices did not yet have PC's but in the petroleum engineering laboratory (startup) we did have time-sharing remote access to a mainframe over a telephone modem. I got a paper terminal (no display just keyboard/printer with boxes of z-fold paper) in the crude oil lab since I had done so well as a teenager with total documentation of computer communication, not much different than a teletype. We had some top people and a couple of renowned engineers and one was a (very rare at the time) computer modeling specialist. He had the fancy CRT terminal in the engineering offices but it did not always work well and he was in the lab a lot to use my terminal. He was up-to-date with the latest financial data right along with the major oil companies who were some of our clients, and I could read his printouts from the stack. Plus talk to him about them and try a couple bizarre what-ifs to see the results that came back. The emerging private consensus was that oil was in a trend to reach $200 so ongoing operations were expected to continue with at least as much activity as when a lesser ceiling was recognized. I started preparing for recession. Anyway in 1982 the price of oil had peaked without coming near $200. A steady decline ensued after which the price crashed in 1986. This was enough to make most alternative energy projects uneconomical, and a true floor was not approached.

8 points by notlukesky 4y ago

If oil gets anywhere close to that it'd be absolutely criminal for American politicians to cow tow to any environmentalists that want to curb oil production/efficiency around the US. Oil prices that high would result in countless deaths from unintended consequences. Would be horribly tragic.

fuzzfactor 4y ago

$380 would obviously be an artificially high price, so it would not be able to remain there forever, and is so high that an actual crash would be likely to occur later on. Oil seems to be quite artificially high already, just not of this predicted magnitude. Back in 1981 the devastation of the OPEC Oil Embargo of the 1970's was still being strongly felt, it had been quite a number of years but many people were still fairly well off and had been able to adjust, even to the continued runaway inflation. Offices did not yet have PC's but in the petroleum engineering laboratory (startup) we did have time-sharing remote access to a mainframe over a telephone modem. I got a paper terminal (no display just keyboard/printer with boxes of z-fold paper) in the crude oil lab since I had done so well as a teenager with total documentation of computer communication, not much different than a teletype. We had some top people and a couple of renowned engineers and one was a (very rare at the time) computer modeling specialist. He had the fancy CRT terminal in the engineering offices but it did not always work well and he was in the lab a lot to use my terminal. He was up-to-date with the latest financial data right along with the major oil companies who were some of our clients, and I could read his printouts from the stack. Plus talk to him about them and try a couple bizarre what-ifs to see the results that came back. The emerging private consensus was that oil was in a trend to reach $200 so ongoing operations were expected to continue with at least as much activity as when a lesser ceiling was recognized. I started preparing for recession. Anyway in 1982 the price of oil had peaked without coming near $200. A steady decline ensued after which the price crashed in 1986. This was enough to make most alternative energy projects uneconomical, and a true floor was not approached.