Skip to comments.U.S. oil prices could sink to $50
Posted on 12/11/2012 7:54:12 PM PST by MinorityRepublican
U.S. oil prices could sink to $50 a barrel at some point over the next two years, according to analysts at Bank of America Merrill Lynch.
But don't expect a corresponding drop in gas prices.
Merrill analysts expect U.S. oil prices to still average about $90 a barrel over the same time period. Global oil prices meanwhile, which more closely dictate the price of gasoline in the United States, are expected to remain high as growth in global oil supplies lags population growth and economic output.
The drop in U.S. oil prices would likely be temporary, caused by the difficulty in moving huge amounts of new oil from places like North Dakota's Bakken shale or Texas' Eagle Ford to market. Already, all the new production has led to a glut of oil in the region.
"No one expected output to grow by a million barrels per day last year," Francisco Blanche, Merrill's head of commodity research, said at a press briefing in New York. "No one."
(Excerpt) Read more at money.cnn.com ...
But don’t expect a corresponding drop in gas prices.
I won’t. There’s always an excuse.
And the Federal tax on oil prices (and gas prices) will increase keeping the price of gas at the pump at or greater then the current price. No news here.
Waiting for Zer0 to take credit in 3...2...1
Anyone who believes this can sell oil/gas short and become a gazillinaire.
The price differential will make it worthwhile to pay Warren Buffet’s Bnsf railroad to haul it across the country to a terminal. This is apparently more environmentally sound than a pipeline... :)
And crony capitalism prevails again.
Oil prices sink, cap & trade skyrockets.......
CNN is full of crap! Again.
It has slowly eased down since early summer.
Gas futures are down almost a buck.
Today... Gasoline USd/gal. 262.42
Same with oil, a bumpy ride but down since late spring/early summer about 20 bucks
Today... Crude Oil (WTI) USD/bbl. 85.89
Have you ever looked at a graph of gas prices over the years?
You think the price never drops??
At the risks of being accused of being a liberal: And Americans subsidize cheap oil exports elsewhere. IHMO, that’s really where this is heading. We’re going to pay high prices here for gas while the crude gets exported offshore. Question is, who is profiting (look at the investments of Congress and the White House)
Given BoA’s recent record, I would’nt put too much faith in this, especially after they bowed down to Pres. Obama’ s DoJ fine.
Of course it drops. It just doesn’t follow normal supply and demand.
It does follow supply and demand. But most people forget it is a world market and priced accordingly.
OPEC turning on/off additional flow is part of the supply curves. Changing economies and changing regulations are also part of the supply/demand.
Not as long as China is willing to pay $100/bbl and has plenty of dollars to spend. Come to think of it, we have plenty of dollars to spend as well considering that we keep printing up new ones at a rate of $4 billion per day.
Leave it to CNN to have a financial writer who doesn’t understand simple economics......Oh, wait, it’s CNN, isn’t it?