2009 and my biggest thought for the year is that the CRUDE OIL PRICE is now very low. The decline in the price over the last 6 months or so is incredible. This is for a product that we are running out of. Production costs vary globally, offshore costs being much higher than onshore, and obviously costs are different country to country. At $44 dollars the price is lower than the production costs in most areas, and therefore unlikely to stay this low.
There seems to be a common view that $75-$90 dollars a barrel is the right price, although the nice round number of $100 a barrel would not be much more.
There are ETFs that track the price, but I think I am going to go for shares in some junior oil companies. This way I benefit from the expected rise in the oil price, and also have the possibility of consolidation in the sector.
As of 15 minutes ago, I am long in Tullow Oil, TLW.L
