Have You Checked Your Oil Lately?
Since gasoline prices are at the lowest levels the market has seen since 2010, Americans are finally enjoying relatively cheap gas prices while filling up at the gas pumps of less than $2.00.
The gasoline prices are said to partially be contributed to the hydraulic fracturing (fracking) and horizontal drilling developments established by the United States causing it to ramp up its shale production and even begin to start storing excess oil for future use. Nevertheless, between 2011 and 2013, the United States overtook both Russia and Saudi Arabia to become the world’s largest producer of by total oil supply. This started the American shale revolution and companies, such as BP, now seemed to want to store its $1.25 billion worth of oil at sea rather than sell it.
To date, China is now the second most oil-thirsty nation on earth, behind the United States. Oil investors have some apprehensions about China’s growth in the past, but China’s demand for diesel is said to peak in 2017. It’s known that Global conflict has long dictated and contributed to oil’s market forecasts and analysts initially believed the current wars in Iraq in Libya would disrupt oil supplies, however this did not happen. Therefore, Iran could boost its global inventory growth to 500,000 barrels per day in 2016, five times its current forecast, which could force oil prices down by $5 to $15. Therefore, Iran would have to battle with Saudi Arabia for its market share. But lower prices could lead to a supply disruption in Iranian, Iraqi, and the Libyan markets, which all have needed sustainable oil prices in order to profit. This could cause others countries, such as Argentina and Venezuela to shore up investment capital to develop deep water reserves.
But what about those who are looking to invest in oil? Traders are predicting an even bigger oil price collapse. Depending on whom you ask current predictions run the range from $15 to $100 per barrel, but oil producing countries seem to expect a rebound even though all factors point towards a downward spiral. There appears to be an overabundance in the oil market, as Russia continues to pump oil at record highs and the United States has ended its export ban after almost 40 years. But Iran is due to return to the global energy market and in the middle of all this, China’s growth is slowing and the demand for oil seems to be dropping.
Or could it be, Saudi Arabia and OPEC wants to keep the oil prices low. Since oil is the primary source of income for ISIS, it would make sense for Saudi Arabia to cut the cash flow to ISIS by keeping the oil prices low. Or are the Saudi’s trying to push out the western oil producers by keeping the prices low. The Saudi’s want to control the world’s supply of oil and gas. It believes that it can do this only by keeping out the higher-cost producers. Hence, it will do what is necessary to control the market.
Therefore, have you checked your oil lately? If so, let us know!!!!!!!!!!!!!!!!!!!!!!!
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