EC If You Listen Carefully, The Bankers Are Actually Telling Us What Is Going To Happen Next

World From Space - Public DomainAre we on the verge of a major worldwide economic downturn?  Well, if recent warnings from prominent bankers all over the world are to be believed, that may be precisely what we are facing in the months ahead.  As you will read about below, the big banks are warning that the price of oil could soon drop as low as 20 dollars a barrel, that a Greek exit from the eurozone could push the EUR/USD down to 0.90, and that the global economy could shrink by more than 2 trillion dollars in 2015.  Most of the time, very few people ever actually read the things that the big banks write for their clients.  But in recent months, a lot of these bankers are issuing such ominous warnings that you would think that they have started to write for The Economic Collapse Blog.  Of course we have seen this happen before.  Just before the financial crisis of 2008, a lot of people at the big banks started to get spooked, and now we are beginning to see an atmosphere of fear spread on Wall Street once again.  Nobody is quite sure what is going to happen next, but an increasing number of experts are starting to agree that it won’t be good.

Let’s start with oil.  Over the past couple of weeks, we have seen a nice rally for the price of oil.  It has bounced back into the low 50s, which is still a catastrophically low level, but it has many hoping for a rebound to a range that will be healthy for the global economy.

Unfortunately, many of the experts at the big banks are now anticipating that the exact opposite will happen instead.  For example, Citibank says that we could see the price of oil go as low as 20 dollars this year…

The recent rally in crude prices looks more like a head-fake than a sustainable turning point — The drop in US rig count, continuing cuts in upstream capex, the reading of technical charts, and investor short position-covering sustained the end-January 8.1% jump in Brent and 5.8% jump in WTI into the first week of February.

Short-term market factors are more bearish, pointing to more price pressure for the next couple of months and beyond — Not only is the market oversupplied, but the consequent inventory build looks likely to continue toward storage tank tops. As on-land storage fills and covers the carry of the monthly spreads at ~$0.75/bbl, the forward curve has to steepen to accommodate a monthly carry closer to $1.20, putting downward pressure on prompt prices. As floating storage reaches its limits, there should be downward price pressure to shut in production.

The oil market should bottom sometime between the end of Q1 and beginning of Q2 at a significantly lower price level in the $40 range — after which markets should start to balance, first with an end to inventory builds and later on with a period of sustained inventory draws. It’s impossible to call a bottom point, which could, as a result of oversupply and the economics of storage, fall well below $40 a barrel for WTI, perhaps as low as the $20 range for a while.

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Obaid Kazi 6 years ago Member's comment

Here the oil MARKET RUN BY NEW YORK STOCK NOT BY THE MIDDLE EASTERN ARABS WHEN THE BARREL RUNS TO $140 PEOPLE ARE TALKING ABOUT OPEC. NOW THE BARREL SEEMS TO DOWN TO $40 OR 20 THIS IS ALL MANIPULATION OVER HERE NOT OVER THERE. WE THINK SUPPLY IS MUCH HIGHER THAN DEMAND. NOW AUTO MAKERS SUCH AS G.M FORD DOESN'T HAVE TO WORRY THEY WILL BE FILTHY RICH AGAIN. ITS A GAMBLING GAME,

Peter Hi 6 years ago Member's comment

2008 Headlines news: "A barrel of oil hits 140 USD as the demand of oil is much higher as supply and oil supplier are not capable to keep up with getting the oil out of the ground. Nobody knows how high the price can go, but some are guessing 200 USD/barrel is not out of question" 2010-12 Headlines: " Chrysler and GM in big trouble as automakers are struggling selling car due to prices of oil. It seems like SUV and trucks are getting the biggest hit. City of Detroit is getting hit financially, unemployment is thru the roof and Detroit becomes a ghost town" 2015 headlines: " Predictions are for oil to go as low as $20/barrel as supply is much higher than demand and there is a glut in oil reserves" Meanwhile we paid 7 years high prices for gas which in reality should have been somewhere at 50 cents/liter, many companies went to bankrupt, city of Detroit went broke and few very wealthy people got filthy rich again. That my friends I call market manipulation, public manipulation and greediness at its best.

Alex Toussieh 6 years ago Member's comment

An addiction to oil is BAD and the only ones who benefit from it are those who sell oil. We, THE PEOPLE, are entitled to keep our money. Stop nagging us to pay more for oil!

Dan Tobias 6 years ago Member's comment

$20 oil? Next.

Hyacinth Joseph Chelat 6 years ago Member's comment

Today is the tomorrow you worried about yesterday.

Niklar55 6 years ago Member's comment

Could it be that the bankers are hoping to foreclose on lots of oil wells, as they did on housing in the last crisis? Every time a crisis is engineered, the major banks end up laughing, and pocketing billions.

Sabelle Tallano 6 years ago Member's comment

HOW THEY CAN SEE, IF THEIR EYES A BLIND AND HOW THEY CAN HEAR IF THEIR EARS ARE CLOSED AND THE FUTURE OF THE WORLD IS UNKNOWN AND UNCERTAIN IF THE ONE HOLDING IT WILL NOT REMOVE THE VEIL FROM HEAVEN. DERIVATIVES IS NOT ALLOWED TO USE BECAUSE IT IS AGAINST THE RULE OF LAW, IF WE CONTINUE TO USE IT AND FOOL THE GLOBAL SOCIETY OF THE WORLD THEN THAT IS YOUR PROBLEM THAT YOU MAKE CHAOS

Jack The Cool 6 years ago Member's comment

Its been a nice game between the banksters and the customers..The game turns if the opponent is alert... jack Bizbilla B2B portal

Allen Victor Cox 6 years ago Member's comment

The House of Cards will flutter to the Ground and just watch the people go after thee Banksters Hang em High all of em!