Oil Prices over 100 sustainable??
Hi Guys,
Just wanted to discuss the major factors that could affect oil price in the near future.
The factors in support of oil sustaining over 100 are that oil price seems to be driven mainly on the hopes of growth. A tight oil supply and increasing demand would be the major forces to keep driving prices up steadily over time. Iraq had cut Future Production Target in half. The global economy, driven by the success of the Chinese and Indian economies, most likely will grow despite the European and US sovereign debt crises, and the always-high US trade deficit. Also there are supply problems in Europe and Africa and China's growing oil demand. But that too has come down recently and its imports were down from a record high rate a year earlier.
However, some analysts are forecasting commodities such as oil prices will drop next year amid weak global economic growth and a stronger US dollar, which makes oil more expensive for investors who buy with other currencies. Plus there would be a draw down in inventories. How would the death of Gaddafi affect Oil prices? EU Summit? Plz share your views.
too much potential for demand destruction
assuming your talking about WTI, it will stay within the ranges its in, possibly lower
the greater the inflation of finite inputs in an economy, the less it will realize real growth. Oil supply is artificially suppressed to keep the prices high, only in order to keep oil nations rich and American oil companies rich. Demand for oil is not increasing in the western world, however it is increasing in the east at a rapid rate. Eastern nations will be forced to pay higher prices which will hurt their growth, but hey, arab oligarchs gotta live the lifestyle they were accustomed to. So is oil sustainable over 100? not for long periods....
It can stay there as long as the banks can sell the malthusian oil running out story. Extra support in the Brent complex at the moment because of active manipulation (much easier than WTI!). Given all global blends except wti now price off brent, whole thing is dragged up. Fundamentals mean nothing.
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