How low will OIL Go ?

I stayed up late last night to watch another painful session in the stocks.
Not for me, luckily - but for the wider economy in general.

Oil, has dropped nearly 10% since the start of the year ... thats just 6 days.
I know everyone on these forums are up to date on the oil downfall, but its starting to get to a very worrying point.



In 6 months it has dropped around 70% from $113 - $34

How low is this going to go?
Mid 20's? lower?

There are reports that there's a serious glut still, production is out performing demand and global industry is falling meaning a further decrease in demand for OIL.

I work in the legal industry in a city that is primarily about Resources, Gas, Iron and Gold. I can tell you its getting pretty dire. Jobs are drying up, layoffs are increasing, companies are struggling and according to some friends inside the game, its going to be a year of dire straits.

Is this all about Russia? Are we really pushing economies to the brink by deliberately pressuring the price of oil to hurt Russia?

I couldn't see many threads on this, I'm really keen to get a few thoughts from the intelligent types on this board.

a reply to: Agit8dChop

I am no expert, but I think you nailed it with the Russia deal...

This just may be the price for what occurred in Ukraine?

While it does have the side effect of lowering IS' money flow from their oil sales, I think Russia is the intended target.

I've heard that OPEC is flooding the market with oil and refusing to slow down production to try to stop America and other countries from fracking to get at whats left in the ground. It's like a childish game being played. On top of that, Iran is now also selling oil.

I've also heard that we won't see a price above $50 all next year.

Everyone is dumping oil because the Lockheed Martin Fusion reactor is coming soon. They are all getting as much $$ for the oil as they can while they can.

What happened is countries in the ME have put themselves in a hard place. When oil revenues pay for all the social programs in a country and a countries financial health relies on this product almost exclusively something happens.

What happens is that countries instead of cutting oil production have to increase production in order to keep their countries finances afloat. IF they stop pumping and cut services to balance finances mass unrest will result.

a reply to: jellyrev

Good point.

Never thought of that angle, but it smacks of truth.

Saudi Arabia may have sold the greater margin of their future output on the futures market so the pain might be felt more so by those that gambled oil would rise (banks etc). One of the best indicators for the market is the Baltic Dry Index which collapsed to a 28 year low prior to the 2008 collapse, Today the Baltic Dry Index is even lower than it was in 2008 so it looks like there is a stampede to cash (reason USD has risen) on the anticipation of a market crash worse than the 2008 event. Buckle up,

This started off as an attempt by OPEC to put the frackers in the US out of business. It should have been short term, the frackers fail and prices rise. Then several things happened. The threat of ISIS to Iraqi oil went was reduced and they were pumping more than expected, Libya began peace talks and with that started producing more oil than expected, Russia with its economy in a free fall started pumping out all they could and the frackers cut costs and stayed in business. Then China's economy slowed and thus slowed reduced the amount of demand that was expected out of China (also why other things like Gold, silver etc. are dropping). This year Iran will start flooding the market and Libya will see big boosts in production as well. Over all of course this good for the US and World economy.

So no, nothing to do with Russia. Other than the Russians are pumping like everybody else trying to compete for market share.

Very interesting viewpoints on this situation... thanks!!

With the push globally, to move FROM oil to environmentally friendly sources due to climate change, those who have had the great run of profits from the fossil fuels industry, must be moving their assets to capitalize on what replaces their cash cow?

Where is that money going? Has there been a significant shift of resources to the next "cash cow" ?

a reply to: Agit8dChop

I'm sure there's still plenty oil left and I'm quite sure more people will die because of it:

one of the Saudi royal family’s deepest fears is that one day Saudi Shiites will secede, with their oil, and ally with Shiite Iran.

theintercept.com...

a reply to: Agit8dChop

Having read the posts- and all make sense- then this could lead to an economic collapse as the momentum builds.

So WHY hasn't Russia, an major OPEC player, anybody pushed the ME to a way higher war footing?? That would drive the prices up overnight!

So far, everyone has avoided taking out ANY significant oil production. So easy to do!

Any explanations??

Over all of course this good for the US and World economy.

a reply to: MrSpad


This is horrible for US economy and the world economy. I really don't know how you can say this is good for anybody. Everything else you said is spot on tho.

So WHY hasn't Russia, an major OPEC player, anybody pushed the ME to a way higher war footing?? That would drive the prices up overnight!

a reply to: nwtrucker


Tensions in the ME are only going to increase more than they already have. You also cant finance a war when youre operating at a deficit.

Saudi is the only one responsible for it getting this bad. Everybody else wants and needs a more reasonable price.

a reply to: Agit8dChop

Now everything everyone stated is probably more correct then what I might suggest as mine might be a scam. However I heard that major stock holders in the American oil industry basically sold off their shares which caused the market to bottom out. They did this because of some "new method" probably a scam or hoax to use silanes or sand to create energy
heres a link
blog.hasslberger.com...

it most likely a hoax or scam

It's really good for MY economy (here at home).

I can actually afford to pay my bills and buy food, without wondering how I'm going to afford the gas in my car (which living quite far from the city, I need).

I was actually able to afford Christmas this year, as compared to the last 8 to 10 years.

And we are going to finally be able to do something this year that we've not been able to afford to do: go on a vacation this summer.

So I know, everyone has been running around yelling about how these low oil (hence low gas) prices are killing the economy......yet most people I know (friends, family and locals) are jumping for joy and doing something that most of us have not been able to do: Actually spend money on stuff that we could not afford before.

But I'm sure someone will come along and explain to me and everyone else how being broke all the time due to extremely high fuel prices, to where we can't pay our bills, default on loans, have a hard time buying food, and not being able to buy anything, except through credit, placing us in more debt is much better for the economy an us........

Now everything everyone stated is probably more correct then what I might suggest as mine might be a scam

a reply to: jobless1

Mr Spad nailed it. Investors arent leaving for alternate forms of energy. The supply is outpacing the demand and nobody can afford to cut production, or they dont want to give up their share of the market.

a reply to: eriktheawful

Exactly. The money is only redirected to some other, equally valid, section of the economy. It doesn't disappear. Others-like us-are the winners.

originally posted by: BoldAlligator

So WHY hasn't Russia, an major OPEC player, anybody pushed the ME to a way higher war footing?? That would drive the prices up overnight!

a reply to: nwtrucker


Tensions in the ME are only going to increase more than they already have. You also cant finance a war when youre operating at a deficit.

Saudi is the only one responsible for it getting this bad. Everybody else wants and needs a more reasonable price.

I'm not so sure about that. Tell me Putin wouldn't benefit from a dramatic price increase. It wouldn't even take a financially debilitating war to do it. Just redirect ordinance/missiles towards a few refineries rather than military locations. No added expense whatsoever.

originally posted by: JacKatMtn
Very interesting viewpoints on this situation... thanks!!

With the push globally, to move FROM oil to environmentally friendly sources due to climate change, those who have had the great run of profits from the fossil fuels industry, must be moving their assets to capitalize on what replaces their cash cow?

Where is that money going? Has there been a significant shift of resources to the next "cash cow" ?

No you still need oil. Its not just used for fuel. Oil still has a big future. What youre seeing now is the big players want to push the smaller guys out, gain more of the market after they fold, then prices will go back up. Thing is, which was unexpected, its just lead to the industry being more efficient and these smaller companies are still getting by.

I'm not so sure about that. Tell me Putin wouldn't benefit from a dramatic price increase. It wouldn't even take a financially debilitating war to do it. Just redirect ordinance/missiles towards a few refineries rather than military locations. No added expense whatsoever.

O no, I agree with that. Every oil producing nation would more than benefit. I was referring to Saudi Arabia specifically, because theyre the ones mostly responsible for prices staying low.