I am going to go on a tangent here but hear me out please. I do think there is a genuine slowdown in oil demand globally and that +100/barrel prices were exaggerated. I do realize that production went up as well, so on the supply side, we might have overshot a bit as well. At the same time, I also think that sub $50/barrel prices also do not make sense as well. I think that the banks and speculators are artificially driving the price drops and that we’ll very soon see a significant rebound in prices, let’s say a 50% jump from a $50/barrel baseline would be reasonable. So, I think that we are yet again victims of a great financial manipulation driven by domestic banks and a small group on Wall Street who benefits from price swings. That’s just my two cents, I have no degree in finance or similar but reading all the signals this is what I think will happen.
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It's about destroying Russian and Iran and getting regime changes or capitulation. I can see two years of this, though I hope not.
The big oil players are going to buy up the small US players for pennies on the dollar.
Some banks are in deep do-do with money lent to the oil patch like Wells Fargo. Be careful who you bank with, there will be bail-ins even in the US.
I see oil prices staying low until various governments topple. Saudi & Dollar, Inc did this to the soviet union and it worked in the late 1980's.
Brave new world now.
Only countries left with central banks that are independent of the FED / ECB banking system are:
Russia: (have to roll over $280 billion in private debt in 6 weeks with no source of funding + $650 billion more in the next year)
Syria (few more months?)
Iran (hanging on by fingernails)
North Korea (will collapse most likely in 5 to 7 years - basket case)
Venezuela (death spiral)
Argentina (death spiral / case closed)
Cuba (death spiral)
Libya (case closed)
Hey, aren't these all the evil countries?
this particular decline in oil price is the dawn of a new era where OPEC has far less power on controlling global prices. While this sort of thing has been cyclical in the past, this situation is different. The US is not importing anywhere near as much oil as they used to, and that weakens OPEC's ability to increase price by cutting back on supply. Now when OPEC cuts on supply, the US oil industry just produces more to offset the difference. In a way, OPEC is still controlling the price of oil in the only way they can: driving it down by letting the market flood with extra supply. This has nothing to do with banks or Wall Street, and everything to do with countries that pay 90% of their bills with profits gained by oil exports. It is purely economic strategy of OPEC (mainly Saudi Arabia) and it is working precisely as intended. The glut will end when OPEC decides that competition has diminished sufficiently to allow them to gain more control again. If that never happens, then we may not see $100 oil again for a very, very long time.
It's George W. Bush's fault!
An interesting, yet flawed view of the situation. There is much more glut in the market that your post would lead us to believe.