smurphny

How Long Will The Price of Oil Remain This Low?

As "engineer" above has noticed, the % fall in crude prices is way out of line with decreases in consumption. The run-up in price was manipulated to unrealistic levels by people who have nothing to do with crude oil and could not possibly take delivery or use it. Regulation is needed to remove the gamblers out of this essential commodity. This is not coffee or pork bellies, it's a national necessity that should have a different set of rules to trade it. In any case, now that all useful parameters and fundamental valuations have been trashed, oil will probably swing down to equally ridiculous levels. On my inflation adjusted long-term chart, if you take out the 2 major spikes and just draw an average line, it looks like oil should probably be trading around $35/brl. If you figure in general inflation using the 10X rule, it looks like oil should be around $40. I think companies like Exxon keep oil on their books at $45 or so. These numbers are probably somewhere around what a "fair" price should be and probably where it will finally settle. Let's hope there is some sort of sensible regulation put in place to take Vegas out of oil markets so this does not happen again. There ARE places for government, this is one of them.