patrick.net

my prediction: oil will go above $85 by the end of the year

Well, there is a furniture dealer down here in Houston who is betting the first 500 customers who buy $7000 worth of furniture between now and the end of the year, they get it free if oil is trading above $85 a barrel on 12/31/15. He has done similar things twice before, he bet that the Broncos would win against Seattle in the superbowl two years ago and lost. Then he bet that the Astros would not win more than 63 games last year, he lost that bet too.

Yeah, I agree with the OP - this $40 some odd dollar oil isn't going to last. I think it was political, related to keeping things calm during the succession of the next Saudi Absolutist Monarch first and foremost (Ukraine second). Back to $60-70 oil by the summer.

Anyone who actually believes that oil could hit $10-$20 per barrel anytime this year is a moron!

I'm inclined to think that oil has already hit bottom.

It depends on what the global economy will do. $10 seems too low but on a global slowdown I don't see oil going up much (it could go down further) unless they cut the current rate of production. But so far markets have been resilient.

$10 doesn't sounds too far off...

Mark D says

Gary Shilling is at it again: $10 oil

Where was he one year ago when oil was trading above $100? Most of these people are trend followers.

Mark D says

my prediction: oil will go above $85 by the end of the year

$85 seems too high: there is extra production capacity in the world and it's not going away just because someone stops pumping. One can start pumping again if the price climbs a little.

Prices near $100 are the result of artificial scarcity imposed by OPEC. The change is that no one is in a position to impose such scarcity now.

$10 may be too low, but $30 wouldn't surprise me in the short term. And I think prices below $50 could stay for a while until low investment creates new scarcity.

Strategist says

Most of these people are trend followers.

They are but sometime the trend is your friend.
People tend to suffer from recency bias and think everything will soon go back to "normal" - as defined by "last year".

The trend is your friend... until it ends...

Three questions drive the price of oil:
1) Supply: how much production capacity exists at any given price point?
2) Demand: how many morons will keep buying SUVs that use twice as much fuel to go the same distance as a safer car?
3) market distortions: oil futures trade on a dark market where hedge funds have been buying long to hedge against inflation, thus creating inflation; will they stop?

Anyone notice how fast gasoline prices went up?
.50 cents in So Cal in no time at all. Strange, how slowly prices go down. Yet how quickly the can zoom up.

i hear most of the shale rigs will only break even if the price is $70. so i speculate $85 is high enough for them to profit but low enough to prevent the second shale boom.

does supply have to double to justify 50% drop in price?

i bought NOV and CVX in Jan when oil was at the bottom. i will sell if it gets to $85.