Posted on 02/08/2016 12:22:58 PM PST by nascarnation
The top exec at an oil trading company thinks the era of crude trading at over $100 a barrel might never return, and the stuff could remain between $40 and $60 for as long as the next 10 years.
"You have to believe that there is a possibility that you will not necessarily go back above $100, you know, ever," Ian Taylor, Chief Executive Officer of Vitol Group BV, told Bloomberg. His company is the world's largest independent oil trader. Instead of any significant increase or decrease, the exec believes crude could hit $45 to $50 a barrel in the latter half of 2016 and hover around $50 for the next decade. Prices would fluctuate about $10 in either direction over those years.
The key to these sustained lower prices is that oil production in US shale fields, Canadian tar sands, and other parts of the world remove some of OPEC's power to set prices. Plus, reduced sanctions on Iran further add to the global supply. "It's hard to see a dramatic price increase," Taylor said to Bloomberg. OPEC's own numbers back up Taylor's prediction. A 2015 study from OPEC countries forecasted crude to be between $40 and $76 a barrel in 2025.
One thing that might boost oil prices is if OPEC convinces other countries to reduce production, and Taylor thinks there's a chance that could happen. "It's probably slightly against, 60-40 against, but it's a real possibility," he told Bloomberg.
Cheap oil continues to benefit American drivers at the gas pump. The AAA Daily Fuel Gauge Report puts the current national average at $1.739, which is down 44 cents from the same day last year. Oklahoma has the lowest state average at $1.42 a gallon. Low fuel prices have also spurred new car sales, especially trucks, crossovers and SUVs.
No SS raise again this year. That's 3 or maybe 4 "no raise" years under Obama. The last raise was totally eaten by the raise in Medicare Part B which comes right out of the SS check.
It is not a difficult issue if one can recognize history repeating itself:
"It may take that long for the Arabs to effectively squelch our domestic exploration and development."
After that, One thing that will boost oil prices is if OPEC convinces other countries to reduce production.
Then, they will be back to newer gold-plated Bentleys and junkyards full of late model MB's, Lambo's etc.
I disagree much.
The new “best customer” of Arab oil is China.
That fun country with mafia business practices and 1.5 billion expendable people to enforce them.
Won’t be much fun for the towel heads the next 10-15 yrs in my view.
Hmmm, I am not sure on what basis. I am not an oil expert, however, I have been watching history; both that of the U.S. and of Germany.
Are you suggesting China will make a controlling move on the oil fields? That is certainly possible and, if so, would simply trade hat styles vis-a-vis the U.S. One would think the model I presented would remain in play.
The key to these sustained lower prices is that oil production in US shale fields, Canadian tar sands, and other parts of the world remove some of OPEC's power to set prices. Plus, reduced sanctions on Iran further add to the global supply.Iranian crude production *may* rise, but the current production has been sold into the world market, even during the decades of sanctions. Production from shale and tar sands will fall off as they become unprofitable, which is the case when the market price for crude sinks sufficiently.
Indeed, and Mr. Hamilton expounded on that.
(I was being sarcastic, I’m enjoying the cheap gas in my Pontiac G8, whee)
Interestingly, word is that Fiat/Chrysler is dropping the Dart/200 because economy cars are a loser and they want out, so that they can focus on the profit center trucks and SUVs. In line with this, they may contract with another manufacturer to produce a compact for them.
I rented a Mazda 2 recently, and while a cute and efficient li’l car, well, it wasn’t quite the same. The interesting thing is that Toyota contracted with Mazda and is now selling it as a Scion. Back in the 90’s, GM sold the Corolla as a Geo. It’s a crazy, mixed up world.
(And I really wish I could buy a new G8 when my old one gets long in the tooth, but alas...)
I don’t expect the Chinese to treat them nearly as nice as we have over the last 50 yrs.
My wife filled up the tank in her car today for 78.9 cents per gallon. I wish I had a large storage tank for it at that price.
Yeah this ethanol gas doesn’t store well because of problems with the alky.
I went out the military base last week and pumped in that $1.34 gas. I told my wife I wanted to go on a long drive and come back and fill up again. I wish I had a huge tank to go buy a lot of this cheep gas and have it for later when the prices go back up. I can’t believe it will stay this price for 10 years.
Disclaimer: Opinions posted on Free Republic are those of the individual posters and do not necessarily represent the opinion of Free Republic or its management. All materials posted herein are protected by copyright law and the exemption for fair use of copyrighted works.