Will oil price drop further and challenge February 2009 closing at $34.62?
6 replies (most recent on top)
Dollar will appreciate. Not good for oil price in the short term.
Investment will move away from oil and toward less risky blue chip companies, further depressing oil stocks. BHI stock will continue to fluctuate as gambling follows judicial rumors, but then settle closer to it's real value of $15
Higher credit costs will not help the zombie companies
Cheap oil is already coming in. Canada's WCS oil price to the states is well under $30. Obama doesn't want the pipeline cause then Canada could expand its market and get a better price for its oil.
Stockpiles are there because the light crude oil from shale doesn't have refinery capacity. Saudis dirty heavy oil has no problem finding a refinery.
If interest rates rise, it means the dollar is more expensive, which means even lower oil prices. They have to add some kind of incentive and if a cheap dollar isnt an option, then cheap oil comes in. It will mean greater stockpiles, too.
My economics skills are light, but I'd expect the price to rise