Here’s a story that I’m obligated to cover: Newsweek Magazine almost 10 years to the week has published a cover story on Oil that echoes the now (in) famous Economist cover, Drowning in Oil. The latter was published on March 4th 1999, and the recent Newsweek story Cheap Oil Forever appears April 20th 2009.
Americans will not see this week’s Newsweek story, however, because the cover story is printed in the International Edition. For collectors of newspapers, headlines and other media indicators this fact may prove even more useful, and notable.
More broadly, however, that these two widely publicized images now serve as book-ends to the most recent bull market in oil raises the understandable question: why must we sleepwalk once again, into the next price spike? Sure, I have some respect for the natural Malthusian to Cornucopian lifecycle that we are now tracing out once again. But after turning the page on both of these and actually reading the articles inside, I assure you last week’s Newsweek piece is just as patently absurd as the 1999 piece in the Economist.
Traders and investors might make use here of the timeline, however, that appeared after the 1999 Economist cover. That marked the beginning of a three year period in which one had time to patiently accumulate energy equities and oil before the big move triggered. However, if you have been reading my blog, my newsletter, or coverage of each in the past few weeks, you will know my current timeline for the next spike is shorter. Using the collapse of Mexico’s oil production as my pole star, and with sufficient time for global industrialism to recover, I maintain we will crack 200.00 a barrel sometime in the year leading up to the Presidential election, 2012.
Oh, and in case I was not clear: this week’s Newsweek cover is indeed – absolutely without question – the echo of the 1999 Economist cover, and will achieve even greater infamy by 2012.