Do you think the price of crude oil will continue to rise, or will there be a market correction and will drop?

Question

Please explain why in your response.

Answer 1

You may see a short term sell off but oil is never coming back down. Demand is too high right now!

Answer 2

The supply and demand forces do not explain the high price.  The huge amount of global  capital investing in energy because it is rising does explain it.  We keep hearing that demand from China and India explain it.  These countries are mostly poor and the high fuel prices will reduce demand there just like is starting to here.  There will absolutely be a large drop as hedge fund managers move on to something else or begin shorting oil.  I cannot tell you when, but my hunch is we are getting close.  The higher it gets before turning down, the more dramatic will be the fall.  Hopefully it happens before causing a global recession.

Answer 3

A lot depends on when the balloon bursts...

Oil is worthless if the consumer does not buy it, similar to all the homes that have fallen into foreclosure.

America is very skillful using the "squeeze play", they will continue to increase the price until the effect has no more value.

Remember, increasing the price of oil will cause grief on a large scale, the typical consumer will avoid buying retail items or planning a vacation.

The idea of the typical american having to drive a sub-compact will not occur for a very long time since most people cannot afford a new car.

Additionally, most americans would feel unsafe to drive a beer-can, they value their life more than the large risk!

We own the Alaskan pipeline and sell virtually 95% of the crude to Japan; kinda ignorant for our government to c**p on us.

Answer 4

It has correlation with election.

It is likely to rise, bear after election

Answer 5

Oil will remain high for the next few years.  Will it keep rising?  Yes, analysts like Goldman Sachs have created a self-fulfilling prophecy.  By predicting $150-$200/barrel prices, commodities traders are likely to continue speculating.  While I see prices balancing out as the US and europe reduce demand, they will remain at or above $100/barrel.  Why?

I fact is with the exception of the middle east, current oil fields in the US, Mexico, and Russia are depleted.  Output is falling.  What oil remains is more expensive to pump.  If prices fall below $100, then they cease to be profitable and oil companies will cut back production.

Brazil made a significant oil find, but it may be 2-3 years before rigs are running at optimum output.  The middle east oil countries are not expanding their oil infrastructure.  Even if they did, there will be a delay while new rigs are constructed and put into operation.

India and China are far from poor.  They are growing at a robust pace.  Both countries boast a new and growing middle class.  They have money to spend and a taste for the luxuries we've enjoyed for several years.  This is part of the reason luxury retailers like Tiffany's continue to report growing earnings.  If they can afford Tiffany rings and Coach handbags, they can afford $100/barrel oil.

Unless new oil fields are tapped, prices will remain high.

Answer 6

I think it will continue to rise because we live in a capitalist nation and as long as "the powers that be" in the mix continue to make money from it and Americans continue to pay any amount for it someone will try to make as much money as they can

Answer 7

The price action in Crude Oil over the last couple of days suggests that we have entered the bubble phase.  Prior to this, the market was actually rising in an orderly fashion.  The problem with bubbles is that you do not know how high the price will go before the bubble pops.  However, it is clear that it is nothing but emotion that is driving that market at this point.  In the short run, prices will likely go higher, and they could actually go significantly higher.  To get a good idea that a top is in place, watch out for a day where Crude Oil trades in a very wide range, similar to today, makes a significant new high price, but ends up closing at the low end of its range for the day, or even below the previous day's close.  This is what we call a Key Reversal Day, and it is a good sign of a top.  The market will likely then fall from there for a few days, and may even try to re-test the top, before finally selling off in earnest.  

Scott Cole

www.kungfutrader.com

www.bestdaytradingstocks.com

Answer 8

I'm sure the prices will go higher and higher as we get closer to the end of Mr. Bush' presidency. Let me explain why:  1- oil companies are not paying taxes for their earnings(since Mr. Bush took Office), 2-Mr. Chainey, our Vice-President, is the major stock holder of Exxon oil Company, he has power to manipulate the prices, somehow< in the stock market and on the streets, 3- Mr. Bush father is the major stock holder for Shell oil company.  do you believe  they are going to leave all this money on the table? they don't pay taxes, they don't have anybody to stop them from manipulating the prices and they only have less than six money before everything is over!!!!!