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Originally Posted by Perfectlap
That's all it is talk. Oil prices will be back up because lower prices globally will lift aggregate consumption. Some analysts project a half point increase in global GDP from ~$50 oil. The longer these low prices stick the more consumption of just about everything will pick up (the best stimulus there is for the U.S. consumer) which of course shifts the all important expectation of demand back in a bullish direction. Global production was exceeding actual demand even back when oil was pinned above $100. Yet the prices would not budge! Evidently the speculators expected demand in the faster growing economies to keep plowing ahead despite the excess production.
Obviously they don't expect that to be the case in the near term anymore but you can't stop countries with low debt, growing populations, easy access to capital, and improving infrastructures to just grind to a halt forever. The expectation of demand can turn on a dime. I remember in 2008 or there abouts when oil prices shot north in the middle of the trading day because some news site reported a gun boat battle in the Gulf... that happened two days prior.
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I read a ton of 'articles' relating to mutual funds and the stock market, and of course Oil is heavily mentioned. For every article I read saying oil is going up, I can find one that says it's going down. A lot of 'conspiracy theories' out there - the biggest being that oil is being forced down in price in an attempt to cripple Russia economically. Others think the mid east is pushing prices down to hurt US production. Many experts claim it's about China and how their growth has stabilized and therefore demand is down big time. At the end of the day, it's a whole bunch of speculation - and you might be very right and it'll shoot back up - or my gut might be right and it keeps going down. Either way, there is money to be made in the markets right now - just might be a bit longer term.