Here's a bit of weekend reading ('cept it ain't the weekend any more) .... a look at 12 myths of the oil market.
I don't know enough about the oil market to even know some of these myths are things, but perhaps some of our ForexLive traders with more oil market knowledge can let us know how these 12 myths stack up:
Top 12 Media Myths On Oil Prices
The article ends with the writer's look at where he thinks prices are heading:
- Oil prices will increase as weekly EIA production numbers begin posting declines as we saw last week. Demand will increase. Inventories will start getting eaten into by midyear. Europe will contribute as will Asia and the Middle East. A shrinking Chinese market is still growing at 7% a year, and that market is much bigger now than when it was posting 10% yearly growth five years ago.
- Rich Kinder was right in calling the bottom in the low 40s and John Hofmeiser (former President of Shell Oil) and T. Boone Pickens are probably pretty close to being right with their call of $80 as the top in the next year or so.
- A solid $65 to $70 by year end is the more reasonable number and is just enough to hold off development of some offshore projects, oil sands work and a good amount of the non-core shale plays.
- A stronger dollar will also do its work here as will a Saudi Arabia hell bent on market share. There will be less and less for shorts to hold onto and very few will want to be stuck on the same side of the trade as the big investment banks.