Will crude prices come down ???

Question

will crude prices come down to its own level at 44 $ barrel ?

Answer 1

it will come down for a short period, but after that they will go up to 200$ per baral. bcoz oil resourses are finishing day by day, they are at there end point

Answer 2

i would say, no. i doubt that oil prices will ever drop below the$100 a barrel anytime soon...

Answer 3

crude oil price cannot come down because its not grown, its being depleted from the earth, its getting more scarce. It will go up more but men will find some thing as alternative.

Answer 4

They did a study that said if speculating was banned by Congress, oil would sell for about $95 a barrel. Speculating the future price of oil has become very popular -  lots of hedge? funds and mutual? funds are starting to get into it. It used to be just oil companies speculated, but now everybody is.

Answer 5

Not on a short term; But the price should certainly come down, in about 6 to 8 months period.  When most of the countries are now taking about tapping alternate source of energy.  This would be certainly be playing at the back of the mind, for OPEC countries and already some of them have started increasing the oil production.  Iran and Israel tension would ease down, after some initial excitement.  

In all probability, the price would come down, but definitely not to the extent of 70$ a barrel.

Any thing below the current level should do a lot good to most of us.

Answer 6

Yesterday, oil futures broke a technical barrier, and the analysts paint a very gloomy picture of it trading above USD150 a barrel spot and going up to USD 175 barrel, or even USD200 a barrel in the coming days. If this forecast turns out right, we are in for persistent double digit inflation. No government will be able to consistently shield its citizens from the oil shock, and has to pass it on, sooner than later.

Why the oil prices are rising almost everyday? Can it be that commodity speculation is fuelling the oil prices? After the sub prime crisis, falling bond and stock markets, is the world community putting all its money in oil futures, and as a result, are the prices going up in the spot and futures almost on a daily basis? Or, is the oil cartel curtailing production and artificially creating a   short supply driven price rise? Or, is the Iranian and Nigerian situation causing the price rise? Or, is the weak dollar causing the price rise? Or, is the answer somewhere else?

We have a situation here of a consistent economic slow down or stagnation in most European countries and US combined, coupled with rising inflation. Asia too is not immune to inflationary pressures, but there is no major slow down in their growth. This is the paradox. The slow down in US since past so many years ,culminating in  current recessionary trends , and USD weakness has not  impacted the growth of Asian countries in general and China and India in particular. A decade back a slow down in US would have translated in to an Asia flat on its back requiring mouth to mouth resuscitation. What is different now?

The answer is that Asia is now creating its own demand economy and fuelling its own growth. It no longer catches a cold when US sneezes. This expanding economy of Asian countries is fueling the demand for oil. It is not an artificial shortage or commodity speculation that is fuelling the oil prices, but the ever increasing demand from Asia whose economies are expanding. It is a situation of demand outstripping the supply, as the Asian giants China and India consistently show increases in their net imports of oil, and other major Asian countries imports also grow.  How valid is this line of thought? Let us look at some numbers as per table below, and analyze it.

Oil

Consumption 2001

In mio bbls Oil

Consumption

2006

in mio bbls Absolute change Change as a

% of global

total Average growth

rate

World 28251 30887 2636

USA 7172 7551 379 14 1

Ger/Fr/Itly 2447 2321 -126 -5 -1

Asia 5054 6310 1255 48 5

China+India 2592 3567 975 37 7

While oil consumption has actually declined in Western European countries belonging to G7, it has shown an average growth rate of only 1 in the USA. . Asia accounts for 48% of change in global total, and the average growth rate is 5. India and China put together have shown 37% of change of global total, and their average growth rate is 7.

India and China were net importers of the stuff. The year 2006 figures read as follows i/r of the Asian Giants.

Country Net imports in

Mio/bbls Consumption in

Mio/bbls World rank

India 627 939 6

China 1225 2628 2

The consumption levels were quite high in 2006 up to which we have data, and recent times it would have only gone up even merely taking in to account the increase in the number of motor vehicles on the Roads of these countries leave alone consumption relating to the industrial and manufacturing sector.

In conclusion, Asia is now the cause of the oil price rise and the inflationary trends all over the world. George Bush and Gwendolez Rice were not very far off the mark when they attributed the increased price of food products, to Indian people consuming more rice and wheat than before. But the commodity which they are consuming more in prodigious quantities is Oil, and not rice or wheat.

We may see oil rationing sooner than later to curtail consumption, as small increases in administered prices of petroleum products makes no impact on the consumption of the stuff. As a corollary, double digit inflation is here to stay, along with higher interest rates in the near term.

Answer 7

no