Why are oil prices so low?
- Thread starter Laissez Faire
- Start date
Low oil prices --> Projects are shut down --> Reduced supply --> Higher prices.
And even if oil prices were high due to speculation, what's to stop that from happening again?
And even if oil prices were high due to speculation, what's to stop that from happening again?
Still, oil could go lower from here. The chart is still looking kind of ugly. As of today, I don't think I would have wanted to enter on the long side.
Filled at 130,50 NOK today. 1000 shares STL. MAE = 1,30 NOK. Closed @ 132,20. Up 4,25% for the day.
Let's go!
And up 10,36% so far today. This is too easy!
My understanding was there is a lot of supply, and it will take ages to change that. I don't follow Oil closely, but there is a lesson to be learned from mining stocks the last few years. Many "quality" firms that were recommended by analysts have crashed 50-90%. Newer traders and market analysts never saw it coming, the shares broke support numerous times. And share prices suggest they think the underlying commodities may drop a lot lower. No amount of shuttered mines ( caused by too optimistic an expansion ) prevented companies from becoming unprofitable and worth a fraction of their previous valuations.
If you truly believe commodities will rebound, then a conservative play would be the TSX index, and an aggressive play would be buying mid cap miners at distress prices.
Anyone trading in the 1990s has seen it all before.
Everybody who has to stop producing because of low prices, will start producing again when prices raise again. So this will stop high prices again. Level of consumption will be most important element in the marketprice of oil.
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LOL;
good points but since most in USa buy[not sell] oil + gas, that explains why people love oil/gas bears+ hate oil bulls................................................. Arabia, like TX is selling oil huge + making a profit on the volume.Amen; better sell a lot @ $58 than $28.Not a prediction.
Rig count hasn't declined by much. Will be many months before oil prices rebound.
With WTI ~ 55/57 and Brent ~ 60/62, I'm neutral to mildly bearish. Recall the Saudis saw oil around 60ish for an extended period of time.
