Oil Prices Will Fall: A Lesson In Gravity

Oilprice.com ^ | 18-05-2015 | Arthur

[bananaman22]

The oil price collapse is not over yet. It is more likely that the Brent price could fall back into the mid-$50 range than that it will continue to rise toward $70 per barrel.

That is because oil prices have risen based on sentiment alone. The fundamentals of supply and demand indicate a dismal reality: oil prices will fall and may fall hard in the near term.

Our present situation is like that of the cartoon character Wile E. Coyote. He routinely ran off of a cliff and as long as he didn’t look down, everything was fine. But as soon as he looked down and saw that there was no ground beneath him, he fell. Hope and momentum cannot overcome gravity.

Neither can ignoring the data.

When I look down from $60 WTI and almost $68 Brent, I see no support except sentiment. Like Wile E. Coyote, we need a gravity lesson about oil prices. What goes up for no reason, will come down sooner than later and it may fall hard.

[thackney]

That is because oil prices have risen based on sentiment alone.

Stock levels begin to fall, production rates begin to fall and this writer thinks that is only sentiment?

[proxy_user]

Gentlemen, place your bets! The options market is open to all, if you think you know what will happen in the future, then you can wager your money on it.

However, a surprising number of people who thought they knew what would happen in the future have lost their stake.

[who_would_fardels_bear]

Style
by Howard Nemerov

Flaubert wanted to write a novel
About nothing. It was to have no subject
And be sustained upon the style alone,
Like the Holy Ghost cruising above
The abyss, or like the little animals
In Disney cartoons who stand upon a branch
That breaks, but do not fall
Till they look down. He never wrote that novel,
And neither did he write another one
That would have been called La Spirale,
Wherein the hero's fortunes were to rise
In dreams, while his waking life disintegrated.

Even so, for these two books
We thank the master. They can be read,
With difficulty, in the spirit alone,
Are not so wholly lost as certain works
Burned at Alexandria, flooded at Florence,
And are never taught at universities.
Moreover, they are not deformed by style,
That fire that eats what it illuminates.

[Cicero]

Nice. I used to read Howard Nemerov, but I don’t think I’ve seen that one.

As for the price of oil, it’s anybody’s guess.

[Jewbacca]

I predict the price will change.

[SkyPilot]

The recent rise in oil prices make as much sense as the Dow reaching all time highs while the actual economy is in a Depression. The author is merely pointing out the obvious.

[MNDude]

Whenever I see an article like this, I’m suspicious that the writer is trying to manipulate the market.

[Bulwyf]

It’s obvious oil will go up.

The amount of conflict in the middle east alone is driving up prices, as well as demand elsewhere. While I don’t see it going over 100 bucks a barrel, I easily see 80.

This is good news for North America though. It’s very profitable for us, not as much for some other folks, but we do well at that.

[proxy_user]

Random Walk theory would suggest that an equal number of articles are written on each side; 500 articles saying the price of oil will plummet, and 500 articles saying the price of oil will soar.

[Hugh the Scot]

There is no economy & there is no market. There is only the too big to fail brokerage houses, the central banks and the government, lining one another’s pockets.

[kjam22]

Yeah..... from here.....it will see 80 before it sees 40.

[Night Hides Not]

Yup, summer driving season is nearly upon us. People will still figure out a way to get their vacation in.

[trebb]

Stock levels begin to fall, production rates begin to fall and this writer thinks that is only sentiment?

Perhaps he sees it as a mirror of the Stock market - seems to be running on PFM these days and "sentiment" is a non-voodoo sounding expression....

P - Pure
F - (fill in the blank)
M - Magic

[The Working Man]

Perhaps he’s right, perhaps he’s wrong. But with that said, I have friends and a few relatives that own ridiculously small pieces of mineral interest in several Texas counties. And they are receiving nearly daily offers for their mineral interests.

To me that means at least two things. 1. Those ‘little’ bits of mineral interest are very valuable. 2. There is a great value to these people to talk ‘down’ the price a barrel of oil will be worth in the near term future. And to expect that oil will still be valuable in the long term.

[SkyPilot]

There is no economy & there is no market. There is only the too big to fail brokerage houses, the central banks and the government, lining one another’s pockets.

Truer words were never spoken Hugh.

The Stock Market is not based on "investing" in anything, but rather gambling at a roulette table where the House is run by the Fed pumping Monopoly money on the table. Soon (perhaps sooner than anyone imagines), the table will collapse to the floor.

There is also very, very little real "economy" out there in the United States. The only "growth" we have seen in the Obama Criminal Reign has been in the following areas:

- Disability Fraud

- Welfare Fraud

- Lawsuit Fraud

I have said this before on the forum, so I apologize for repeating myself. While watching television with my wife a few months ago, we were innudated during the commercial interruptions with ads for Social Security Disabiltiy lawsuits, and lawsuits for anything and everything else.

"Get the benefits YOU DESERVE!!"

The current scam is an insult to Americans who are truly disabled. Not only that, the scammers are bleeding the system dry, to include regular Social Security. Our medical costs have soared in large part to pay off the greedy and evil lawyers and their "clients."

I do not have much hope for America.