Discussion in 'Business & Economics' started by Saint, Dec 7, 2016.
now the price is hovering around 47~48.
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So what? Please don't start giving us a day by day report on the crude price. We can all find it out of we want to and day by day changes tell you nothing, unless you are a trader.
How low oil can go?
I remember it at about $10/bbl at one stage in the mid 80s. It all depends on supply and demand and supply is a function not only of economics but also of political decisions. So if someone turns the taps on to make a political gesture, a very low price can appear for a while. So I don't think your question has a sensible answer, really.
Theoretically it could go to zero. Now, that's not likely. It's all a matter of odds. World oil supplies have surged and prices have fallen. It's the old supply and demand curve in action. US oil production has become more efficient and less costly. US oil producers can produce more oil for less money. Each week US rig counts have increased. http://phx.corporate-ir.net/phoenix.zhtml?c=79687&p=irol-rigcountsoverview
In order to drive oil prices higher we will need to see either a supply constriction or a surge in demand. The oil futures market is predicting a relatively flat oil market for the balance of 2017 with a slight uptick in 2018. The best indicator of future prices is probably the futures market. But as you know, no one has a crystal ball. Futures traders can and do get it wrong too.
will Arab's countries go bankrupt if oil drops to very low?
In practice, no.
Russia will go bankrupt long before any Arab country.
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