Anyone have a strong opinion one way or another about the direction oil prices will move? Anyone working in a related area?
Personally I suspect we will see a decent drop in crude prices over the next 6 mths. OPEC has maintaned current production rates and US Stocks are now sitting at the highest level since march of 1999 (335 million barrels). With global economies cooling from last year, I suspect the current prices is based on speculation due to supply concerns from political issues in Nigeria and Iran. Fundemental economics dictate that all other things remaining the same the price will decrease. I’ve read literate saying we can expect as low as $40/barrel… Time to sell those energy stocks?
Re: Oil + Natural Gas Price Outlook - Next 6 mths
didnt OPEC recently decide to defend a barrel price of $62, even if it means dropping production? i doubt it'd fall to $40 in a year.
NG price has taken a hit recently thanks to jet streams blessing north america with a very mild winter, leading to a gas glut. with winter almost ending, NG stocks have taken a hit over the past few weeks, now is a good time to load up because NG price is going to come back up once electricity plants start burning cheaper NG than diesel (the ones that have the capability) and rigs drilling NG drifting back to oil.
Re: Oil + Natural Gas Price Outlook - Next 6 mths
I've read a report (by CIBC World Price forecasting) that if you see any kind of hurricane season in the Gulf of Mexico the price of Crude Oil could jump to $80 a barrel for an extended period of time.
Re: Oil + Natural Gas Price Outlook - Next 6 mths
My guess would be that price of gas will continue to slide down for a while but the price of oil will continue to stick close to the $60 mark. The unstability in Nigeria & Iraq and uncertainity in Iran will not let it come down. As the price of oil will stabilize, the price of energy company stocks will start to respond to their performance instead of the price of oil. Most of the major oil companies have increased their E&P budget, atleast till the end of 2007. Which indirectly means, the major service companies stocks will continue to flourish.
Watchout for a few stock splits in 2006!!!
Re: Oil + Natural Gas Price Outlook - Next 6 mths
witchdr, any reason why would you think natural gas would go down further while oil rises? if i understand right, historically, CL and NG prices have been tied together by a 6:1 or so ratio quite consistently. why do you expect them to diverge in trend?
Re: Oil + Natural Gas Price Outlook - Next 6 mths
bily…am i resposbile for this spark of an interest in economics?
j/k
Re: Oil + Natural Gas Price Outlook - Next 6 mths
NG crosses $8, oil is on its way up to new heights. anyone still think prices will drop?
Re: Oil + Natural Gas Price Outlook - Next 6 mths
I think Oil price will stay there or even will rise $4-6 over the next five months. As someone said, if the hurricane season spared GOMex then will see price going under $60 as early as October this year. By December it could be $58-63 range to remain there for next 4 months or so.
Re: Oil + Natural Gas Price Outlook - Next 6 mths
Well Im happy I looked at the issue carefully. Im making a killing on oil stocks of late.
I doubt you’ll see such a drop down to 50 range any time soon. Futures contracts are trading closer to 70 till 2009. The spare production capacity over world demand is tiny and as you can expect demand will only grow with time as production rates level off or even decrease. IMO we are living in the time of “peak oil”
Until you see significant shifts towards using phase tranformation technologies (coal to liquids, Natural Gas to liquids) to produce fuels you will see nearly exponential growth in oil price. Unfortunately for consumers the required infrastructure for sut technology is very pricey and the transition will not be an easy one.
Re: Oil + Natural Gas Price Outlook - Next 6 mths
I think at the moment there is an unnaturally high level of prices for both the O&G. There is enough stock of both O&G in US which should have helped lower the prices. To me investors are fuelling small incidents around the world to keep the prices artificially high. Looking at the prices of Oil Service Companies (although they are doing extremely good), it is evident that many are priced way higher than what they actually deserve even with this astounding profit season for them.
Towards the mid to the end of the year, we will start to see production increases from major oil producers (e.g., Saudi, US, Iran??). IMHO we haven't reached the "peak oil" period. We are reaching a period where a step change in technological advancement in oil exploration and production will take place. At the moment we are only able to produce 30-40% of the oil and gas in any reservoir. Just look at the possibility if we can increase the recovery rate to 70/80% or more.
Re: Oil + Natural Gas Price Outlook - Next 6 mths
SLB, BHI, HAL, BJS declare record profits. SLB split stock already. HAL expected to follow soon.
Re: Oil + Natural Gas Price Outlook - Next 6 mths
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Re: Oil + Natural Gas Price Outlook - Next 6 mths
O & G PRICES, I THINK WILL INCLINE HIGHER THAN THEIR CURRENT LEVEL.REASON IS OBVIOUS UN CERTAINITY ON INTERNATIONAL LEVEL, ESPECIALLLY OPEC INVOLVING COUNTRIES.UNLESS WE SETTLE OUR DISPUTES WITH DIALOGUE, STABILITY IN O & G PRICES CANT BE EXPECTED.
Re: Oil + Natural Gas Price Outlook - Next 6 mths
and oil hits record highs three days in a row, now at $77 a barrel.
with hurricane season about to begin and NG still low, most NG stocks still looking real cheap right now.
Re: Oil + Natural Gas Price Outlook - Next 6 mths
there are many reasons to oil and gas high prices:
first their a short supplies due to decades of low prices: he oil companies did not invest enough to develop more fields cause crude oil was too cheap!
second: there is an extraordinary demand from china!! westerners FAILED to predict chinese economic boom, cause they thought that chinese gvt would not allow such a big capitalism economic rise, but it happened, and now china is a BIG player on the commodities market: their demand is high from industry t construction and recently, personal cars, they want more and more oil, steel, etc.....but supply can't be extended magiacally!
now that oil prices are high, oil companies are investing big to develop old and new fields to produce more...but it will take time
and we don't know if that will be enough to absorb the huge growth of the chinese demand
some people say commodities prices are overevaluated due to hedge funds speculation on these markets...may be true, but with iran, north korea and lebanon conflicts, tensions on these markets are not soon to settle ....