Arc of Instability = $200 Oil

03-24-2011 • CNBC.com

Satyajit Das, the author of "Traders, Guns & Money: Knowns and Unknowns in the Dazzling World of Derivatives," is not one of the world’s great optimists. But what is clear from his work is that he understands risk. And he is telling investors that $200 a barrel is a distinct possibility and, over the long term, $500 is feasible. Das said he is very worried about the price of oil and the chances of political upheaval in Saudi Arabia. “The fundamental issue is people are focused on Bahrain, Libya and Qatar, the real elephant in the room is Saudi Arabia, it is one of the most repressive regimes in the region and more unstable than many think,” Das told CNBC Thursday. “There are some dangerous undertones in the region," he said. "Saudi sending troops into Bahrain could be setting up a Sunni/Shia regional conflict.” The West’s good intentions in Libya could simply add to more anti-Western feeling in the region which could destabilize the world’s central bank of oil, Saudi Arabia, Das said. “An arc of instability that starts in Morocco and ends in Afghanistan has been created and Saudi sits in the middle of this arc," he said. "The king is well over 80 years old, the future of Saudi Arabia looks very unstable.”

1 Comments in Response to Arc of Instability = $200 Oil

Comment by Don Duncan

Entered on: 3/25/2011 1:18:57 PM

Here we go again: "...over the long term, $500(/barrel oil ) is feasible." Ah, no, eventually $1million oil is CERTAIN. That's correct, I said "certain". Because he did not define "over the long term". It could come 100 years from now or 50, or 10, or 1 year and someone would say: "Das was correct." Timing is everything, i.e., being correct, eventually, is useless. We need to know when, within a reasonable time frame, e.g., before we get too old or even die. Otherwise, what good will it do us? Hell, I can predict with absolute certainty that the sun will nova and destroy earth, so what?

Even if oil went to $500 next year it could be a great benefit for the U.S. Domestic drilling would begin and the price would drop. The U.S. could become an oil exporter. We have the largest field in the world in N.D. It has not been exploited because more profit was being made from foreign oil tied to the Fed's monetary policy. The sad truth is we are all exploited by politics for the benefit of a few short sighted men who hold humanity back. Even worse, they do so with their victim's sanction. Well, most of their victims, not me, I'm a voluntaryist, i.e., I don't surrender my sovereignty without a fight, and I've been struggling against government all my 68 years.

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