I don’t see the Saudi’s making any big production cuts to save the rest of OPEC’s collective asses, but I don’t think they will need to.
$70 oil will stimulate worldwide economic growth which will in turn increase demand for oil which will slowly drive the price back up to $100. I predict oil will stabilize again at around $100 again in about a year.
Oil can’t go much further above $100 without stimulating more U.S. shale oil production which would again lead to a glut in oil and lower prices.
Disagree. Oil actually has much further to fall to reach equilibrium.
I would say this...two things have to occur for oil to get back toward $100. Putin probably has to give in on the Ukraine or retire as one of the conditions. Second, I think the dollar has to grow in value in terms of it’s relationship to the Euro. For ten years...way back into the Bush era....the dollar shrink to like 1.35 to the Euro. It was out of whack at that value, but everyone believed that a cheap dollar would boost US business sales in Europe (it barely scratched the surface).
If neither of these events occur...I’ll predict that oil stays below $80 for a decent amount of time.
I have been in this industry for about 35 years, and I'll say that you have a pretty good analysis. The shale play has become the "trump" card to keep OPEC from holding us hostage. Too bad this technology was not practical back in the '70's.