Yeah it depends what and who you are working for, for example financial advisors for banks are pretty much just sales people. They have certain products and they need to sell them to the customers so the bank benefits. And these people who write to newspapers / talk in tv shows etc. The more people read/see it the more the company publishing it gets money. And surprise surprise, the more insane their "prediction" sounds, the more people will take a look, especially when the content is published online. Also if they do manage to get lucky for their insane prediction, that is something that will carry them a long way. If they miss, in a week no one will remember that and they will just try again.
There are no crystal balls that is true, but at the same time I feel that these are chess moves and world is their board, we are just picking up some crumbs if we are wise enough.
If talking about banks and governments then yes, they do have the capital and influence to do a thing or two on the markets. But these individual "experts" don't have the cash... though they can always try to sway the market their way if enough people believe their "predictions"
OPEC has just announced there will be no production cuts. Looks like the shale producers will continue to be under pressure to turn profits. I wouldn't be surprised to see more industry consolidations. Looks like I'll be holding my $EXXI shares a bit longer.
No surprises there. OPEC can't even manage to make a production cut if they wanted to, as OPEC is nothing but a name nowadays. The individual countries do as they please and right now no one wants to give up market share. I'm still holding onto my USO, just a small amount though as it definitely seems like this is a more long term play than I had originally anticipated.
When I saw that announcement, the first thing I thought about was the saying ´sweet lemons´. It is a psychological thing where people are forced to say they want something, simply because they have no choice anyway. I´m with you, I think these ´we are not cutting production´ announcements are nothing more than the Saudis trying to keep relevancy with being able to announce anything. They cannot say ´we are going to cut production´. because then the world will see that the Saudis are no longer able to get other OPEC members to follow them. This already happened back in the last 1990s. They can´t drive up prices by talking about production cuts, because nobody would believe they can do it.. so instead they announce something that they can´t control, and make it seem like it was their decision. The other thing to think about.. This is an absolute win-win for the USA. We get cheap gas AND we don´t have to deal with the environmental impact of actually producing it. The Saudis are going to keep oil under $80 just so we don´t come in...
I think oil will test the market by dipping to $40 after the summer months. I'm not alone with this opinion as at least a couple experts in the business believe so as well. I doubt the middle east is looking to cut production as their economies are already suffering from the drop in prices. They are likely looking for more customers rather than looking to cut supply.
It's hard to tell who should be trusted these days. On some blog I stumbled into yesterday or day before [can't remember the exact day] the blogger, an "expert" in all matters oil was quite sure that oil will hit $30 this summer. I don't see that happening but $40 . . . well, it's possible that oil prices would plunge that low but wouldn't go any lower than that.
The ones that determine the prices are the oil producers and those behind them, so in a market that worth billions and moves the world it's pretty hard for us to nail on any accurate prediction.
All that we can go off is previous performances so in that case, your probably right. When predicting the price of things such as oil, all we can do is estimate what might happen.
