Of course some Republicans in the 2012 election predicted that if Obama gets re-elected
“The only thing we learn from history is that we learn nothing from history.” —Georg Wilhelm Friedrich Hegel
The experts still don’t know all the factors that enter into these equations ...
It was caused by Saudi Arabia in an attempt to re-gain market share and in the long term, price. Basically it was the action the libs always accuse Wallmart of taking; selling at a loss to drive out smaller competitors. In this case it is an attempt to drive out competitors who have higher production costs.
Not something that could be predicted by normal market forces.
Like the monthly unemployment data, it was “unexpected”.
None of the mainstream messages are untrue. Yes, there’s an oversupply of crude in the world today. Yes, global growth (and hence demand for crude) is anemic at best. Yes, the Saudis are unhappy with the U.S. shale revolution. Yes, the Saudis would be delighted to see Iran squeezed to death and Russia squeezed to weakness. Yes, there is marked divergence in monetary policy today, a divergence which pushes the U.S. dollar higher and commodities priced in U.S. dollars (like oil) lower. So stipulated.But all of these things–particularly everything to do with supply/demand fundamentals–were just as true three months ago, when oil was $40 higher.
The question is, why did the King of Saudi Arabia — the leader of OPEC — decide to keep oil flowing at a rate that he knew would cause oil price to collapse NOW, instead of years ago?
It has always been in Saudi Arabia’s interest to keep the price of oil low enough to end fracking here and to bring Saudi Arabia’s Shiite enemies — particularly Iran — to their knees. But why is this happening NOW?
Maybe it’s because Barack Obama stabbed Saudi Arabia in the back when he suddenly lifted sanctions against Iran last year, thereby allowing Iran to keep its nuclear program going at full speed and also freeing up billions of dollars for Iran to use for funding Shiite terrorist groups like Hezbollah and supporting the Syrian dictatorship.
There’s a Sunni vs. Shiite war going on in the Middle East, and Obama has taken the side of the Shiites against Sunni Saudi Arabia and its allies. So the King of Saudi Arabia has finally said, No more Mr. Nice Guy, and has put its own interests above those of its new pro-Iran enemy, the U.S. under Obama.
The Saudis are now determined to economically destroy Iran so that it can’t create nuclear bombs which will be aimed at Saudi Arabia.
So when will oil prices go up again? When Iran’s economy has been wiped out.
Because the financial elites of the world have manipulated the price down to arm-twist Russia into backing down on Ukraine.
The “side-effects” of it being this low are of no long-term concern to the elites.
This is just how they operate, one of the tools they use - market manipulation.
From this current action we can also infer that the price of crude has been manipulated for a number of years far to the high side of what a legitimate market would look like. That “high price of oil” was part of other agendas that they have merely put on hold to arm-twist the Russian government.
From what I can see, here in my comfy chair, is that the so-called experts,market makers and speculators are in fact a bunch of Lemmings that operate more on emotion than logic. But with that being said, if everyone in these intermingled groups operates that way then it is safe to say that the real ‘logic’ is to be able to determine the psychology of these people and use that knowledge to determine your own investment strategies. In other words determine how they will stampede before they know it themselves.
As for the rest of us in the population... Hang on the roller coaster has a LONG ways to go still.
"The Wall Street Journal's 2014 economic forecasting survey found that 'The economists surveyed expected oil to end 2014 at about $95 a barrel, up from about $92 at the time of the survey.' A big miss to be sure, but they were not alone. The US Energy Information Administration's 2014 outlook gave itself a very wide margin for error, projecting oil prices between $159 on the high to $70 on the low.and
If somebody knew that the oil price was gonna plunge this much, do you realize what kind of money there was to be made on this on the short side of it in any number of ways?The converse to the latter is, "Where are all the losses? Why aren't there a rash of investment firm failures? Bankruptcies? Defaults?" Just as I've been parroting to friends.
If all the predictions were for prices DOUBLE what they are now, there should be BILLIONS in losses on the books of dozens of investment firms for losses on futures contracts. I'm no investment expert, but that's my takeaway.
One takeaway quote from Alex:
That's why the bad times end up so much worse than your worst case scenario, and why, as an old banker told me years ago, "Risk is the price that you never believed you would have to pay."That's the crux of the problem I'm looking at: There appears to be NO RISK in investing in oil, even when all the predictors should have caused BILLIONS in losses after the crash. Maybe I'm in 'left field', but if no one LOST money, then somebody profited off the crash despite all the predictors to the contrary of what actually transpired.
That's telling, IMHO...as is the question that no one appears to be asking.
Hedge Fund Manager Makes $1 Billion After Predicting Oil Price Plunge
http://oilpro.com/post/9882/hedge-fund-manager-makes-1-billion-after-predicting-oil-price-plu