Jim Rogers says Oil Price to Rise “beyond anyone’s expectations”

Speaking with the BBC, Tuesday, Jim Rogers said he believes oil prices will rise “beyond anyone’s expectations” in coming years.

The billionaire investor, author and co-founder of the legendary Quantum Fund also said the U.S. economy will “slow down” as a result of headwinds brought on from higher oil prices.

In firm responses to the host of BBC Hardtalk Stephen Sackur’s contentious questions, the 68-year-old Rogers reminded viewers of last year’s published IEA data, which strongly suggest that world oil production appears to have peaked in 2006—though the agency’s 2010 annual report didn’t make a definitive statement along the lines of the ‘peak oil’ theses.

Instead, the report, entitled, 2010 IEA World Energy Outlook, offered an assumption for plateauing conventional oil production through the year 2035 as a basis for withholding a ‘peak oil’ conclusion that many oil analysts now believe is reality.

“The IEA, the International Energy Agency, says the world’s known reserves of oil are declining at a rate of 6% per year.  There is no oil,” Rogers asserted.

When asked how high oil can go from today’s plus-$100 price tag, Rogers wouldn’t provide his best guess, knowing that bull markets can take prices to levels few people can imagine at the start of a multi-year rise in prices.  Instead, in typical Rogers’ style, he offered a couple of numbers he presumably knows will be easily achieved.

“Well, during the course of the bull market, during the next 10 years, 150, 200 [dollars].  You pick the number,” he said.  “I don’t know, but it’s going to go beyond anyone’s expectations, including mine. And I’m the bull.  But there will be corrections along the way.”

Rogers concurred with the BBC’s Sackur’s assessment that $200 oil will hurt many people within the U.S. and, indeed, other nations throughout the world, but also said many will benefit from high oil prices as well.

Just last month, the United Nations released an intergovernmental study on Climate Change which stated that as much as 77% of global consumption of energy will be met with solar power, wind and other forms of alternative energy sources by the year 2050.

That 190-nation UN study suggests that though some jobs will be eliminated from high oil prices, millions of new jobs in many new industries will be created worldwide as the result of soaring oil prices.

Moreover, the UN report stated that $12.3 trillion of investment into alternative energy sources to crude oil would be needed throughout the next two decades, or half way to the report’s 2050 year endpoint, to achieve 77% consumption of alternative energy sources by 2050.

“Some people will benefit,” Rogers said.  “Remember, there are lots of people in the world.  Somebody’s always benefiting and somebody’s always suffering.”

When asked to comment on the public’s perception that high oil prices are a result of speculators in the oil patch, Rogers said, “I know that’s great on TV and politicians like to say.  If you don’t have investment in the oil industry, where are we going to get the oil?”

Jim Rogers on the Latest Commodities Plunge

Speaking with Alix Steel of TheStreet, yesterday, legendary commodities trader Jim Rogers said he isn’t buying into Wall Street’s popping commodities bubble thesis following the sharp sell-off in all commodities last week, especially those two commodities most widely watched recently—silver and oil.

Instead, Rogers said he’s “delighted” to see the massive sell-off in commodities prices—and in the case of the silver price, “was hoping it would go down” so he could buy some more of the white metal—a precious and monetary metal, whose price has still not achieved an all-time high to match gold’s multiple all-time highs first achieved in January 2008 with a $857 per Troy ounce closing print.

In all, the 68-year-old commodities market version of Warren Buffett has routinely stated that swooning corrections are normal occurrences during commodities bull runs—runs that grossly outperform stocks to the upside, downside and volatility.

And what does Rogers think of the latest across-the-board price plunge?

“Well, not much if you ask me. Markets correct all the time,” Rogers told The Street. “Silver went down a great deal but if you raise margin requirements 150%-200% you would expect there’s something to collapse. It’s good for the market as far as I’m concerned. Silver especially needed a set back and a consolidation. I’m delighted to see everything.”

Buyers who consume every day commodities, such as food and energy, don’t cheer during bull market rallies in “things,” so it’s natural for Wall Street to play down, or even attack the complex with negative comments and impromptu regulation changes, as witnessed by the Chicago Mercantile Exchange’s five margin requirement hikes within eight trading days in the silver market.

The prevailing view of financial commentators and their guests is that the sharp drop off in commodities is good for the world economy and, therefore, good for stocks.

Moreover, calls for bubbles in silver and oil prior to the CME’s coordinated attack on the silver market (and now, the oil market) created a scenario that can easily be spun as evidence of a finally-pricked bubble. Therefore, the crowd should move back into stocks now that the menace of escalating input costs, rising consumer goods prices as well as weaker consumer spending thereafter have now been dispensed with quickly, so goes the logic.

Rogers sees it differently, however.

“I hardly see how silver could be a bubble when, even at its top, it’s still below it’s all-time high,” Rogers explains. “That’s not much of a bubble. A bubble is when things are screaming up every day and they go to new highs, two to three times their old highs. We’ll have a bubble, we’ll have a bubble in commodities, we’re not there yet.”

In fact, when asked about any sales he’s made within his vast commodities holdings, Rogers said, “No, no, no I have not sold any commodities.”