Why An Oil Price Crash Remains Unlikely

Oilprice.com ^ | 06-07-2016 | Mike

[bananaman22]

There has been a lot of optimism returning to the energy markets of late as oil prices have climbed to the $50 a barrel region. Ironically, while a few years ago $50 a barrel would have been seen as an unthinkably low oil price, today it is regarded as much needed relief from prices that ran in the $25 a barrel region earlier this year. Yet with the climb in prices, analysts are now starting to forecast prices per barrel of as much as $80 in the next year. That view is not the mainstream though.

Instead most analysts are looking for oil prices to remain in the $50 range over the next year, and that has some investors forgetting about the possibility of a renewed downside in oil which could create more losses. In particular, noted economist Gary Shilling is out with a much discussed forecast that oil will retrace its losses and fall even further to between $10 and $20 per barrel. No one knows what the future will bring of course, but Shilling’s view is worth considering.

[T-Bone Texan]

When Saud falls, Houston will get full employment.

So yeah, I’m rooting for the Iranians on this one.

In their recent proxy war in Yemen, Saud got beaten handily. A few more defeats like that and they could topple.

[napscoordinator]

I hope it crashes. We need low gas prices.

[Yo-Yo]

Gas here is hovering around $2.10. I’d say it’s already crashed.

[fuzzylogic]

I think it has reached a bit of an equilibrium. Any higher and more rigs will go back online providing more supply. Any lower the increased demand will raise prices.

Oil companies have adjusted to the new levels and there’s lots of production options.

Just an opinion....but it looks like I bought oil stocks at the low point.