Money and Metals

This Canadian website has these remarks on oil supplies. "It is not often that a Canadian bank becomes weather forecasters, but that is exactly what CIBC is doing in a report issued yesterday. CIBC warns that 'A newly formed La Nina in the Pacific and significantly above-average surface water temperature in the hurricane belt of the Atlantic both suggest that 2006 will be another big storm season in the oil-rich Gulf of Mexico.'"

"They go on to say that 'We expect our huge overweight position in energy to generate exceptional returns over the next 9 months with the resumption of the hurricane season in the Gulf of Mexico.' They are looking for $70 crude later this year which would bring on the same surge in gasoline prices that we saw last summer."

"However with tighter supplies of gasoline, in part caused by the fact that the Gulf of Mexico is not back to full production because of the damage wreaked by last hurricane season, the ultimate peak for gasoline prices could be well above last year's record levels. Earlier last year, CIBC World Markets chief economist Jeffery Rubin called for $78 oil this year and now that is followed by the Bank itself forecasting $70 plus oil later this summer."

"We also recall the Goldman Sach's forecast last summer talking about a price spike in oil taking us over $100 per barrel. Although the price calls may be speculative, some energy analysts are forecasting that 2006 will probably be the first year in history where the demand for oil will outstrip the world's supply."