The same nitwits confidently assured everyone that “As soon as the election is over, oil prices will begin rising back up the $3/gallon level, almost certainly reaching that level again by winter.”
I guess they were wrong.
Very wrong!
In fact, oil prices have fallen by a third since peaking at $78.40/barrel back in July and are already down by nearly 9% this YEAR!
An analysis by Standard & Poor's Investment Policy Committee recently concluded that the declining price for oil may have only just begun. The committee reported last week that a price break below $55 a barrel might open the door for a drop to the mid-$40s, where it could stay for three to six months.
There are other analysts, however, who argue that although unusual weather has put a damper on oil futures, demand from fast-developing countries such as China -- and the watchful eye of the Organization of Petroleum Exporting Countries -- will prevent a severe price hemorrhage.
Craig Pirrong, a professor of finace at the University of Houston's Bauer College of Business says, "I'm not a believer that if you break a magic barrier you'll automatically see a certain drop, but $45 a barrel could happen," adding that, “Many commodities like copper are softening dramatically, indicating that the boom is over. With the economy softening worldwide, oil in the mid-$40s is not unrealistic."
The most bullish proponents like Pavel Molanchov, an oil analyst at Raymond James Financial in St. Petersburg, Fla., tend to believe that oil prices are reaching bottom. "We think the mid-$50s is the floor because OPEC is defending a $60 floor, and if they want to defend that level, they will," Molanchov defends that view by pointing out that oil fundamentals are more bullish than they were a year ago because of strong global economic growth.
I guess they were wrong.
Very wrong!
In fact, oil prices have fallen by a third since peaking at $78.40/barrel back in July and are already down by nearly 9% this YEAR!
An analysis by Standard & Poor's Investment Policy Committee recently concluded that the declining price for oil may have only just begun. The committee reported last week that a price break below $55 a barrel might open the door for a drop to the mid-$40s, where it could stay for three to six months.
There are other analysts, however, who argue that although unusual weather has put a damper on oil futures, demand from fast-developing countries such as China -- and the watchful eye of the Organization of Petroleum Exporting Countries -- will prevent a severe price hemorrhage.
Craig Pirrong, a professor of finace at the University of Houston's Bauer College of Business says, "I'm not a believer that if you break a magic barrier you'll automatically see a certain drop, but $45 a barrel could happen," adding that, “Many commodities like copper are softening dramatically, indicating that the boom is over. With the economy softening worldwide, oil in the mid-$40s is not unrealistic."
The most bullish proponents like Pavel Molanchov, an oil analyst at Raymond James Financial in St. Petersburg, Fla., tend to believe that oil prices are reaching bottom. "We think the mid-$50s is the floor because OPEC is defending a $60 floor, and if they want to defend that level, they will," Molanchov defends that view by pointing out that oil fundamentals are more bullish than they were a year ago because of strong global economic growth.
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3 comments:
It's there for all to see: I read about slipping oil prices in USA Today!
What's amazing id the number of people (even people in the media) who believe that the POTUS could manipulate oil prices single-handedly.
Tens of thousands of commodity (oil) speculators, investing in oil futures determine the current and future price of oil (like all such commodities). Those investors look to things like weather trends, oil reserves, OPEC output, etc to determine their investments.
Right now OPEC is considering an emergency meeting ostensibly to reduce OPEC production to keep the slide from becoming an avalanche.
But there are so many people who suffer from acute BDS.
Well, of course the prices are still going down. The Dems are running Congress now. So, we owe it all to them, right?
EOS
(End Of Satire)
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