Capitalist Cow

Why I'm Not Buying Oil's Recent 'Correction'

I thank all of you for your responses, I have enjoyed reading all of them. This was my first Seeking Alpha post and after spur such a debate I look forward to posting more. Before I do, I feel the need to clarify a few items I believe some readers took out of context.

Many readers took the article to mean that I was calling for oil to go back down to $10 per barrel. In fact, I do agree with most of you that we will probably not see that level again. Instead I was simply pointing out that after the significant run that we have had, we are likely to see a pull back or stagnation in oil prices, mainly due to slowing growth concerns. We are already seeing this, or so I believe.

I do agree with User 202445 who said “growth is still growth”, but let's keep in mind that oil futures price in the expected future price of oil. If these current prices reflect 5% global growth and global economics change to expect 3% growth, do you not feel that oil will price in the lower 3% growth in demand?

But to restate my main point, prices don't rise forever. Although oil prices are very inelastic, consumer habits can changes, alternatives can be found, and more oil can be drilled.