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Originally Posted by Parkview_Pirate
Oil down to $42 and change, retracing back to about the 61.8 from the February lows. Also appears to be a key support level around $42.
Where does it go from here? My guess is down, after a weak bounce to maybe $45. Just got back from a 4,000 mile road trip to the Midwest and back. Gas was cheap all the way. No demand, so methinks the economy is sputtering. Backed up by this article.
http://www.reuters.com/article/us-us...-idUSKCN1040G1 |
I have posted so many times trying to correct this meme that will not die about weak demand causing the drop in oil that I should just give up.
But...one more time.
The world will use more oil in 2016 than it did in 2015. Just as it used more oil while prices dropped throughout 2015 than it did in 2014. The issue isn't demand. It has never been demand.
You can blame pricing weakness on the success of American capitalism capsizing cartel pricing. Smart guys figured out technologies (fracking and horizontal drilling) to extract oil from shale. We have a legal system where mineral rights are held privately and can be sold or leased by the owner. The result of that is the US now has the largest reserves of recoverable oil in the world.
My bet (no one should pay attention to this as no one here has been more wrong about oil than me) is that prices will be near $60 next January.
The late summer downturn in prices is cyclical.
I can be very wrong about the direction of prices. But the fact of growing demand is irrefutable.
