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Can Oil Prices Reach $500 per Barrel?

With energy prices falling, most observers relax. Understanding energy prices requires a deeper understanding of fundamental factors.

There is also the matter of time frames. In the short term prices may be softer, responding to global factors like the currency trade or perceived economic weakness. We need to put this in a broader perspective.

Here is the observation of John Taylor, head of the largest and most successful currency hedge fund:

In five years, he says, “we could see oil at $500 a barrel. I would be a buyer on dips of oil.

His bold prediction could be wrong, but it is worth considering. Here at Pumps we agree with the basic thesis — long term strength in energy prices, current weakness presenting an opportunity.

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