From my hastily scrawled notes on his appearance:
- On the recent pullback in oil prices, he observed that there is too much oil right now and that prices could go down into the lower $50's, but that prices would be back up again before long.
- He predicted he won't see $50 again in his lifetime, and he believes the floor for oil prices is around $55. [Could this have something to do with that prediction?]
- In terms of demand, the numbers are not showing much of a drop, though the mild winter helped. Gasoline demand will come back up and oil too, and so perhaps in six months or by the end of the year he predicts oil prices will be back up in the $60's.
- On natural gas, he noted that it had topped out at $15 or so, then recently dropped as low as $7, and he believes it could drop further, as low as $5 or $6. We will come out of this winter with record high storage levels, which will be good for the consumer.
- On alternative energy, he said it "has to be" part of the solution, but "not quick". Ethanol is not a primary fuel, meaning it has to be manufactured, and it is expensive to do so. Alternatives will help, he believes, but will not prevent the general trend higher in oil prices.
- The issues regarding Iran are out of his field of expertise, but he believes the market has come to accept the situation as it stands currently. If the situation changes, the market will react.
- His investment recommendations continue to be the same: Suncor [SU], Canadian oil sands stocks, coal [mentioned BTU and MEE], and natural gas plays CHK ['always good'], DVN, and KWK. These have all been big winners, but he continues to believe they are still good investments. Though the market has been very good to energy stocks, he still believes they are underpriced. The E&P stocks, as an example, he believes are priced for $40 a barrel oil, and as mentioned, he doesn't believe he'll ever see $50 again.
- On the supply/demand balance for oil, further supply is now limited, production is at 85 million barrels a day and in his view can't go higher, demand continues to rise, thus oil prices will have to rise, which will trigger some falloff in demand.
- He has been asked many times what price will hurt demand. He doesn't know, but perhaps $75-85.
- His view is that if there is no event driven spike in oil prices (say over Iran, Venezuela, Nigeria, etc), prices will rise to $90-100 possibly over the next two years, but if something goes haywire, we could get there very quickly.
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