How LOW will it go? No country can produce OIL as cheap as Saudi Arabia. This gives them a dominate position in the energy market, so when Saudi Arabia speaks, everyone listens. The price of crude is not dictated by supply and demand. It is dictated by speculators buying Crude Oil Futures. The truth is there is significantly more oil than there is demand. In an effort to keep prices high, the players act in concert to promote the notion that demand exceeds supply. The problem is, far too much oil is being produced around the world at the present time and this means market share is being divided. If oil prices remain high, Saudi Arabia loses its present market share and risks losing its dominate position in the market in the near future. Down the road when expensive extraction technologies and distribution systems are paid for with expensive oil, the day-to-day extraction costs will be very similar to Saudi Arabias extraction cost. Either OPEC will flood the market to rebuild market share to slow down foreign exploration, extraction and supply, or the world will grossly over produce to compete for the same demand. Either way OIL is going down, down, down. How low will Crude Oil Futures go? Very low....easily in the 20 dollars a barrel range. Perhaps even lower.
Posted on: Mon, 12 Jan 2015 23:57:00 +0000
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