Many analysts are preparing for $80 per barrel oil this summer, but the futures curve for Brent tells a different story. A return to backwardation and crude oil prices in the low $60 per barrel range. Will declining global GDP pave the way for falling oil prices, and how low could they go?
https://www.cnbc.com/2019/04/11/prepare-for-80-oil-this-summer-as-wounded-bulls-rise-rbc-warns.html
I doubt the Americans will allow crude prices to fall too far. They currently have OPEC in line. They've busy destroying Venezuela. They've cut back their own production. All with a view of keeping prices where THEY want. About $60-70, I think.
Christopher NOCK
One reason the US is keen on control of oil prices is its desire to maintain the oil--dollar link. They are quick to severely punish anyone threatening that link. Maybe the Chinese may succeed with their attempted Petro--yuarn, it remains to be seen. But this is probably linked to its trade war with the US.
NOCK
Forgive me if Im wrong here, but wasnt it President Trump that wanted OPEC to lower oil prices? and OPEC that was arguing for more cutbacks?
https://www.cnbc.com/2018/11/23/opec-reportedly-plans-quiet-oil-output-cut-to-avoid-trumps-ire.html
Well he certainly was and OPEC was what you say. And, of course, I'm not expert in the matter, and you certainly read more than me. I read business pages religiously over the long run. What I say is a general understanding of what's going on overall, long term. I'm not into day to day details. I suspect I'm generally correct in the big picture scheme of things. But you're right, I might be wrong. If you feel the bet is I am, please ignore what I say. I'll keep my opinions to myself on the matter. That's fine. No problem!
Christopher NOCK
No worries, you are very insightful:-) I would always encourage you to present your opinions, no matter who might agree or disagree with you.
The EIA is predicting a slight rise in oil prices this year!
https://www.ogj.com/articles/print/volume-117/issue-4b/general-interest/eia-revises-up-oil-price-forecasts-for-2019.html
I see Trump has moved to bring Iran's oil exports down to zero. What that does to the 3 month price, we'll see.
NOCK
In fact, there are countless factors that they determine oil price. Historically, the severe fluctuations have been happened in special conditions. I think, we wont have a special or emergency condition.
Based on profit of Shale oil firms: it can not be less than $50 (WTI)
Based on profit of industrial firms: it can not be more than $65 (WTI)
Of course, the only certainty is uncertainty.
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