Saturday, April 30, 2005

Jim Rogers calls a top in oil!

At $110 a barrel. See you in 9-13 years.

Additionally, a fellow Jim Rogers fan was nice enough to pass on this recent interview with Jim Rogers, which contains additional insight into his thinking.


Q: There’s been some speculation that segments of the commodities markets such as uranium may be getting overheated. Could we be due for pull-back?

JR: There may well be. If there’s a hard landing in China everything is a little overheated right now. But, to repeat myself, with fewer than five mutual funds in the whole commodities world, and 40,000 mutual funds in stocks and bonds, I hardly think this is the end of a bull market.

Q: There is yet more upside.

JR: Absolutely. Even oil should be more than twice the price it is now, just to be adjusted for inflation. And inflation numbers are fraudulent – the U.S. government reports inflation numbers that are false. Oil should triple if you use the real inflation numbers.

Q: So, even at $50 a barrel, oil is a good investment, long-term?

JR: Many people will tell you that the price of oil should be $35 or $28. It’s true that if there’s a hard landing in China it may dip down. But I say to these people, tell me where the oil is coming from that’s going to drive down the price down and keep it down. There have been no giant oil discoveries anywhere in the world in over 35 years. I want to know where this oil is coming from that’s going to drive the price to $28. If it’s out there I want to know about it so I can buy it myself!

Q: Right. Even OPEC have abandoned their $22-$28 price target.

JR: No one knows where the oil is. All these people who are saying oil is going to go down… there might be some blips along the way, but where is the oil that’s going to drive it down and keep it down? Oilfields around the world are in decline. The U.K. has been one of the world’s great oil exporters for 25 years. But it’s going to be importing oil within the decade.

Q: In terms of your investment strategy, what sort of a trigger would you look for to start selling the oil you own now? Is there a specific price you’d pick as the top?

JR: In 2014 or 2018, I’ll think about selling oil. But right now I have no intention to sell.