Whither the Price of Oil?

Thursday, January 08th, 2009

Hot Topics : Hard Assets to Soar in 2009 | Bailouts to Boost Asian Markets | Treasury Bond Short Too Obvious? | Resource Scarcity Ahead

May 24th, 2008 | By John Mauldin | Category: Oil Investment & Alternative Energy

Let me say that I believe the long-term price of oil is going much higher. I was writing about $100 oil two years ago. $150 and $200 oil is in the cards at some point in the future. If you have not read the Outside the Box from last Monday, you should. My friend David Galland points out that Mexico, which supplies 14% of US oil, is likely to be a net importer of oil by the middle of the next decade, as their internal demand increases and production decreases. Iran will be a net importer within six years for the same reasons. Russia’s oil exports are down this year, as are Mexico’s. Energy costs are going to rise in the next decade, and maybe much sooner.

You can click on the following link to read the Outside the Box on where oil exports are headed in our future. And Casey Research does some top-notch analysis of energy investments (not just oil) in a very reasonably priced letter, if you are inclined to invest in individual stocks.

As for today, if I was in a long-only commodity index fund, unless my time horizon was very long I would be watching it closely and have some close stops. And I might wait until I saw what the price of oil was going to do. If you have some profits, then you might want to think about taking some off the table. Just a thought.

The Middle East, California, and Help for Myanmar

Next weekend I will travel with Tiffani to Laguna Beach to be at good friend Rob Arnott’s annual shindig for Research Affiliates. In addition to the high-powered brain trust he has speak (Peter Bernstein, Burton Malkiel, Harry Markowitz, Paul McCulley, Jack Traynor, etc. - now that is name dropping!), two of my good friends and science fiction hall of famers (as well as leading futurists) Vernor Vinge and David Brin are going to present an evening session on what they see in our future. I will be moderating and trying to keep David focused. It should be a fun evening.

My South African partner, Prieur du Plessis, is absolutely driven to get me to come with him to Dubai and Abu Dhabi this fall, and I am going to go. I have never been to those cities, but have read and heard amazing things, and look forward to seeing with my own eyes.

Now, as to Myanmar. By now, you know of the tragedy that is unfolding there. My great friends at Knightsbridge (Ed Artis, Jim Laws, and the team) are arranging to be allowed to go in with official visas to provide aid. These Knightsbridge volunteers are the best of the best when it comes to disaster relief. They know how to get medicine, food, and supplies to where it is needed most, and they personally take it in. They are staging in Thailand. Not only will they take in needed supplies, but they will be able to help coordinate with other NGOs (non-governmental organizations) that don’t have “boots on the ground” to get aid to where it is needed. (Note: no dollars will be spent in Myanmar in keeping with current US government regulations.)

There will be two four-man teams going in. These guys all pay their own way. But they need money for supplies, transportation, etc. We need $150,000 to make a dent. I am going to give you a web link below. You can donate by check or credit card. The address is: Knightsbridge International, Post Office Box 4394, West Hills, California 91308-4394. If you write a check, please note on the check that the money is for Myanmar relief.

The Knightsbridge website is www.kbi.org. It is being changed as I write to update some of the more recent missions, but the link to donate by credit cards works just fine.

I know these guys personally and have spent a great deal of time with them. They have my full 120% endorsement. I am told all the time that I should charge for this letter. So, instead of paying for the letter, why don’t you make a donation? If 10,000 readers sent $100 or $1,000, it would make a huge difference in the lives of desperate men, women, and children. Please consider helping people who have so little. And for some of you more adventurous types, maybe even think about going. And thanks.