These Russians! They're too cute!

[August]

Prediction of $250 oil in 2009 - AllDeaf.com

State-controlled Gazprom plans to double oil production by 2020. This goal could be reached sooner through the acquisition of a stake in TNK-BP, Russia's third-largest oil producer, and industry sources said Gazprom was interested.

Medvedev said Gazprom will only consider investing in TNK-BP after its shareholders have settled a dispute over control of the company.

TNK-BP is half owned by oil major BP and half owned a group of Russian billionaires who have criticised management at the company.

- Double?

[include]

Call my economics wonky if y'want, but surely if they double supply it'll make the price go down rather than up?

[Karl]

It looks like the discussion in that link was from early July 2008, at a time when the price of oil was approaching $150 and rising exponentially; "expert" commentary at that time was saying that oil would never drop below $100 again (which was wrong) and that by now (October) it would be at $200, etc. etc.

[LMagic007]

I don't think they factored in the credit crisis and the impact that has had on markets across the board, not just oil. When the financial markets recover, I expect oil will continue along its upward long term trend. Also OPEC can tighten supply as required to maintain prices at above a certain level.

On the doubling of price aspect, even if Russia doubles its oil supply by 2020, so long as the global demand exceeds supply continually, it may be seen to not be significant enough to bring down prices. As I understand Russia outputs about 12% of global oil production, so even if they double that, its impact on the overall pie wont necessarily be entirely dominating, in terms of shifting oil prices, especially in the face of growing global oil demand and as indicated the ability of OPEC to restrict supply to help maintain desired global oil prices.

[August]

Karl,

That's true. And it makes me think of what a leading American economist (can't remember the name, unfortunately) said just two weeks before the market collapse of October 1929: he said something like: "the stocks are now on an all-time, and stable, high."