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Monday, September 10, 2007

Charlie Maxwell Interview by Bob Brinker - Sept. 2007

This is an excerpt from David Korn’s May 19-20, 2007 weekly newsletter (Click for a FREE SAMPLE ) that comments on Bob Brinker’s Money Talk.

September 8-9, 2007 Newsletter


Bob opened the interview praising Charlie for his predictions on Moneytalk that the price of oil would trade in the $50s to the $70s which has been right on the mark in recent years. Bob asked Charlie if he had changed his forecast. Charlie said we have seen oil go from $25 a barrel in early 2003, to as high as $75 a barrel, with a peak at $78. There was a lot of oil being traded at $75. The rise from $25 to $75 is huge and represents a 200% increase. Nevertheless, Charlie said he thinks supply and demand are roughly in balance today and might stay here for a while, particularly given the weakness that is going on in the U.S. economy. A slower U.S. economy can translate into reduced imports, and thus slow foreign demand from countries like China. This period of transition where we stay in the range of $50s up to $80 a barrel should stay with us for another two years.

Looking forward after the next two years, Charlie gave his forecast as to where he thought the price of oil was going. Charlie pointed out that we have to take into account world population increasing and the demand for more cars in countries such as Russia, India and China -- all this suggests that demand is going up while supply is not. With this as a backdrop, Charlie thinks that by 2010-2011, we could see oil trade at over a $100 a barrel.

EC: Charlie has actually gone on record in the past projecting that West Texas Intermediate Crude would rise to rise to $85 by 2010, $180 by 2015 and $300 by 2020. Based on today's interview, it looks like he raised his 2010 prediction by $15 a barrel.

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