Stephen Margolis - Comments

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Why The Price Of Oil Is More Likely To Fall To 20 Rather Than Rise To 80
6 years ago
The questions of whether crude prices will continue south is rather contentious. Middle Eastern politics do play the major role. However, many tend to forget that China is the consumer benchmark. China has locked in, with the government of Venezuela major drilling concessions mainly though a loan of some twenty billion US Dollars. China has direct access to other such facilities in Africa. Nothing at all that can affect the spot markets in Rotterdam and less so to stabilizing OPEC producers. Crude production has obviously decreased, yet consumption is not down. That is the official story, closing down of hundreds rigs in the US and North Sea. So where is the oil coming from? Apart from Russia, Saudi Arabia and the Gulf Countries, oil production is high in South America, Asia, Africa, Gulf of Mexico, USA, South China Sea and related areas. Fracking may well be on hold for a number of years. In fact, there is no future in fracking. Since cheap oil will continue to flood the markets.
In this article: OIL, USO
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