In one year, the oil price passed an incredible threshold: it only a litter over the price it was in 2009, and the current oil price is less than the half of the oil price one year ago. Basically, oil price got divided by two in 1 year, from ~$103 to ~$49. While this is incredible, story told us the oil can get an higher price quickly after again. So in my opinion, the question is "when?". But rather than counting on my own opinion, I want to get yours about it. Will it stop falling? If yes, when? Will the fall just get a less down rate, but rather a close to -0.001%, or will it goes up? What do you think of this oil price? Is this negative of positing? Are you going to store crude oil just in case? ;p
I think it's inevitable that it will go back up eventually. If I knew exactly when and by how much, I'd be a zillionaire. But my best guess is that it won't be this low much longer - it's already off its recent sub-$40 lows. It's really not such a good thing overall for it to be that low these days.
Pretty much impossible to time it... but it's going to be damn hard for oil to stay at such low levels forever. The Saudis are still happy with keeping production up but them, along with many other big oil exporting countries, are starting to be in financial trouble IF this keeps going on for years and years. It's not really profitable to create new wells anywhere at the current prices... so I'd definitely say that oil will be heading upwards at some point. Not back to where it was though, but I'd say something along $70 a barrel should be sustainable in the long run.
Yes, it will Fall, but it doesn't seem like anytime soon. Gas prices are scheduled to fall at least until Christmas time and I am really enjoying the change. I live in the country and have to drive everywhere so it really helps out here. I think when the demand goes up the prices will rise. In the mean time, enjoy it, it is certainly not going to last forever.
There were rumors going round . . . Russia would team up with OPEC to raise oil prices but considering the fact that OPEC has a not-so-hidden agenda this wouldn't change anything. But . . . . . . Saudi Arabia won't hold out against low oil prices much longer. Already they are starting to feel the impact and they'll either be forced to cut government spending or work with other oil-producing nations to drive the oil prices up.
OPEC is a lost cause. They simply don't have the unity they had in the past and most of the countries make their own decisions.
The price of oil here in the Philippines slid down from 54 per liter to 34, that's for unleaded gasoline that we use. But in the last 2 years, the price was slowly inching upward with 50 centavos to 1 peso increase every 3 months of so. Now the gas pumps register 44 pesos to a liter and there is an impending increase of 1.50 according to the government. The price of gasoline here is deregulated and directly affected by the price in the world market. We are hoping for a slight price reduction before Christmas so as not to affect the cost of products for the holiday season.
Pretty obvious that the Saudis have been looking to push the smaller oil producing companies out of business in North America - and they have in many cases, but the problem they face is those wells from the smaller rigs will just be bought out and the production cost in the U.S. is dropping rapidly. It costs approximately $20 a barrel for shale-oil producers in the U.S, but that keeps dropping. And if there isn't already a glut of oil in the market, now that Obama has got his Iran deal in place, and they've said they'll produce as much oil as possible.
Yesterday CNBC reported the monthly operating rig count had dropped to ~650, about 1000 less than the previous month. The traders on FM last evening said someone (Goldman? don't remember) put out a target price of oil at $20 a barrel. The FM crew, to a person, thought that estimate was too low. Concensus was a drift lower but we are more or less at bottom, oil production will reduce, and some traders are suggesting refiners, e.g. Chevron, ExxonMobil, Valero, are the best play here. All I know is some of the local gas stations are selling regular for as little as $1.91 and $1.95 a gallon; a few holdouts are at $2.07.
My gut feeling is that at least part of the reason for Obama doing this stupid deal is to put as big of a hurting on US and other oil related companies and industries as possible - the same as he has done with coal.