Getting More Constructive on Crude Oil

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...If we are indeed facing Peak Oil in the immediate future then the secular trend for energy prices is up and will continue to rise until a combination of alternative energy and conservation measures kick in. This bull would have a long way to go...Cam Hui

...Now that the oil price has descended about $30 from its peak and other commodities have also been hammered, itís time to become more constructive on crude. While downside risks remain (e.g. cyclical US slowdown affecting commodity prices, China slowing, US$ in rally mode, etc.), I would like to review the bull case for oil prices and detail the reasons why I remain a long-term oil bull.

Peak Oil

I could go on and on about Peak Oil but I refer you to the site Oil Drum and Matt Simmonsí speeches for more detail. It isnít about the world running out of oil but more about world oil consumption running into extraction limits. Robert Hirsch wrote an important report for the US Department of Energy back in 2005 discussing these concepts and how to mitigate their effects.

Peak Oil Concepts

Peak Oil mitigation: 9 women canít have a baby in 1 month Hirschís conclusion was that the US needs to invest in alternative technologies now, because mitigation technologies take time. Put it another way: nine women canít have a baby in one month Ė no matter how hard they tried.If we are indeed facing Peak Oil in the immediate future then the secular trend for energy prices is up and will continue to rise until a combination of alternative energy and conservation measures kick in. This bull would have a long way to go...

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