7:25 EDT - Nymex Crude Futures $105.74, Tapis spot price $109.09

[GliderGuider]

Amazing.

[soothsayer]

1. just means the dollar is falling some more

[whistle]

3. Tail waging the dog!

[whistle]

2. More oil price manipulation and collusion, those future orders will never materialize

...but the prices of gas at the pumps will and in fact are going up mow.

[GliderGuider]

7. You really think so? The spot markets say otherwise

http://www.upstreamonline.com/market_data/?id=markets_crude

8 of 11 spot benchmarks are trading above $103 at the moment

I've never understood the idea that collusion was driving global oil prices. There are thousands of traders working for different companies and countries, all bidding on the same oil, each with their own set of capabilities and constraints. Where does the collusion enter the picture?

[tom_paine]

4. Wow. Nederlander got his assk kicked in that bet. Did he ever pay up?

It could be $125 or higher by the time of the 8/1/2008 deadline you guys set.

[GliderGuider]

5. As you say, the bet isn't up until August. Plenty of time for prices to rise a bit more...

$125 by the end of August (the close of the bet) seems possible. The confounding factor is how fast the global economy tanks, but I think it will take a year to really start unwinding. Even once we're into the depression in 2009 I wonder if demand destruction will be able to outpace supply declines by enough to depress oil prices. We shall see.

This bet is just a small example of what happens to people who have in incorrect understanding of what's going on. Faulty understanding leads to erroneous expectations that lead to bad decisions. Now think about the fact that 295 million out of 300 million Americans have an even poorer understanding of what's going on than Nederland did, and as a result they're betting a lot more than just a barrel of oil.

[GliderGuider]

6. I just went back and looked at some of the chitchat around that bet.

On Aug 31, 2005 I posted this:

(My three year price guess is) Somewhere around $150. I think we're going to see Matthew Simmons' predictions regarding Saudi Arabia's depletion become visible in two years. The year after that we're all finally going to realize that PO has already happened.

I'm fairly satisfied with that bit of prognostication. The CIBC's Jeff Rubin also get it. Here's what he said on Sept. 9, 2005:

Sept. 9 (Bloomberg) -- Oil may average $84 a barrel next year, $93 in 2007, and $100 in the fourth quarter of 2007, as demand outpaces supply, Canadian Imperial Bank of Commerce's chief economist said, jumping ahead of other analysts who are trying to catch up with surging prices.