Oil Prices In 2009

We were intrigued by the results of the recent CNBC poll of money managers on the question of what oil prices would be in 2009. According to the responses, only 2% of respondents think oil prices will average less than $30 a barrel. In contrast, no one believes they could average $75. Some 42% of those polled say prices will average $30-$50 while 56% say it will be between $50-$75.

At this time, we are in the $50-$60 range, betting on a boost in demand by summer, some production discipline from OPEC and the workings of an accelerating depletion factor. What we always take note of is when the consensus view is so lopsided. That generally means it has a better chance of happening than generally thought. Thus, I spend more time trying to figure out what scenarios might make these non-imagined forecasts come true. This is critical if you want to be a good investor in energy stocks.