Oil Over/Under for 2015...

[badcompany]

The bet is whether it breaks the number in 2015:

$30 WTI

Which way do you go?

I go: Under

[lamboguy]

i made it $32, so i have to say over

[JustRalph]

Over

I think it's done ....hope it stays where it is now. I don't see a 10% swing either way unless the Saudi's do something. I think they are in this for the long haul though. At least a year.

[plainolebill]

I'll take the over just based on how much it's dropped already. I think there would need to be a world wide major recession for it to drop that low.

[_______]

I agree with over but if you had asked 3 months ago about over/under $60, I would have laughed at how easy that over was. It's already fallen more than I imagined was possible. If you asked me to rate my confidence with a 2015 low over $30, I'd say 55-60%. When I've already been this wrong, it tempers my opinion of my own opinion.

[Valuist]

I say it doesn't go below $40. Some strong support levels in the low 40s.

Two years from now, many will be kicking themselves for not buying some of these stocks at distressed prices.

Having said that, I'm not ready yet to try to catch this falling knife. I think we will have a little bit of time. Doubtful we see a complete reversal and it rocket back up right away.

[JustRalph]

40 dollar oil will shut down the fracking business

They are already laying off here in Texas

[Robert Goren]

You tell me what is going to happen with the Economies of China and Europe and I will tell you a price. My guess is that Europe stays in a recession because their central banks are too worried about inflation. They are at least several months away from doing a QE. China's GDP growth has slowed to 5-6% after years of double digit growth. The bloom is of the onion as my grandmother used to say there. Americans like to think our production increases caused this fall in prices, but the truth is while it had a small effect, what happened in China has caused most of it. I am guessing that turning around China is going to be harder than most people think. I will say $24, but that is a number that I pulled out my rear end. It could be $19 or it could be $44.

[reckless]

The markets always overshoots well beyond the prevailing expert predictions and thinking --in both up and down markets-- so who really knows how low oil could go.

I have always felt the lack of demand was the real driver when oil started the descent last summer. The hedge funds, wildcatters, traders and speculators has caused the current precipitous drop but the world-wide depression/recession has caused this fall in oil, no question about it.

Yes, of course, the advanced technology and horizontal drilling has made our production prowess the envy of the world. But the production dialogue has been out there for years now. OPEC going into overdrive is a geo-political move as much as a (bad) economic move. If the Saudis didn't hate and fear Iran, Russia, Syria as they do, then they'd have stopped this overproduction by now.

The USA has not grown to any respectable levels for the past six or so years, especially when compared against the GDP bottom in 2008-09. There seems to be a bump up in the most recent quarter, but a lot of that is political hokus-pokus. If there was any real growth there would no longer be any QE. Descending interest rates is another clue that tells the real story -- the USA and world economy is stuck.... therefore, no demand for all commodities, especially oil. No demand mean interest rates go low, stay low, go lower.

Oil gets all the attention on CNBC and Bloomberg right now but other commodities such as corn, copper, and others are at multi-year lows. This is the result of a lack of demand.

European interest rates are even lower.... the EU is still in a depression thanks to failed socialist governments. It's the worst since the late 1920-30s there. 'No one is working anywhere' in Italy, according to a family friend who lives in Puglia. It's like 40-50 per cent for men 35 and under. In Germany, the investor pays the gov't for the right to hold their bonds and paper -- negative interest rates in the leading manufacturing country in the EU! Are you kidding me?

Japan is a joke, plain and simple. Abenomics is a abject failure yet the prime minister gets reelected. He promises more intervention. The billions didn't work the first time, so he's now talking trillions! Their 30-year depression is another driver for a lack of demand. An aging demographic doesn't help nor does trillions in QE, sino-style.

China has stopped growing to anywhere near previous levels and that has been the main driver for the big drop in all commodities. This has hurt all producing nations but especially Australia and the USA.

The markets will stabilize market oil prices at times, but until there is real free-market growth, and not lies and stunts played by all central governments, oil prices will continue its descend, in my opinion.

[upthecreek]

Originally Posted by badcompany

The bet is whether it breaks the number in 2015:

$30 WTI

Which way do you go?

I go: Under

T Boone Pickens predicts it will be up to around $100 in 12-18 months

[badcompany]

Originally Posted by upthecreek

T Boone Pickens predicts it will be up to around $100 in 12-18 months

I believe that's more wishful thinking than a prediction, but, you never know.

[tucker6]

Originally Posted by _______

I agree with over but if you had asked 3 months ago about over/under $60, I would have laughed at how easy that over was. It's already fallen more than I imagined was possible. If you asked me to rate my confidence with a 2015 low over $30, I'd say 55-60%. When I've already been this wrong, it tempers my opinion of my own opinion.

Not to pick on your post specifically, but this thinking is exactly why the price of oil is near its low. When people give up the ghost, the end of movement in that direction is at hand. Put another way, when everyone is fearful, that is the time to buy.

[badcompany]

Originally Posted by tucker6

Not to pick on your post specifically, but this thinking is exactly why the price of oil is near its low. When people give up the ghost, the end of movement in that direction is at hand. Put another way, when everyone is fearful, that is the time to buy.

They're not fearful. They think they're getting a bargain.

IMO, they're falling into a trap.

As for me, I'll be using bounces as opportunities to go short.

[_______]

Originally Posted by tucker6

Not to pick on your post specifically, but this thinking is exactly why the price of oil is near its low. When people give up the ghost, the end of movement in that direction is at hand. Put another way, when everyone is fearful, that is the time to buy.

To clarify my post, I continue to hold every energy related stock I've acquired and am not selling.

Putting a confidence rating on my opinion isn't giving up the ghost. It's just being more detailed than the simple A/B choice any over/under represents.

Re: the un-killable meme that lower demand is causing the drop in oil. Can someone with this belief point me to a source that shows worldwide usage of petroleum products has actually dropped or will do so on a year over year basis in 2015?

Not that projections for growth have been revised down. That is still growth. But an actual "less oil will be used in the future" source.

And absent any such source, how do you square this seemingly unshakeable belief with the lack of any evidence to support it?

[tucker6]

Originally Posted by _______

Re: the un-killable meme that lower demand is causing the drop in oil. Can someone with this belief point me to a source that shows worldwide usage of petroleum products has actually dropped or will do so on a year over year basis in 2015?

Not that projections for growth have been revised down. That is still growth. But an actual "less oil will be used in the future" source.

And absent any such source, how do you square this seemingly unshakeable belief with the lack of any evidence to support it?

Oil demand is not dropping, but its growth expectations are less than previously anticipated. Conversely, oil supply growth expectations are higher than previously anticipated. Small differences on the face of it, but in the absence of any foreseeable checking of either projection, investors must bet that the gap will widen before closing. Personally, I believe the correction is overplayed. Already we are seeing institutional investors coming back into oil stocks as we get into the mid 40's.

http://www.bloomberg.com/news/2014-1...ve-months.html