Nah, price will keep above USD60 after my birthday. What odds will you offer me?
Dateline 2015-03-15, Malaysia Chronicle:
After a steep drop late last year the price of oil has stabilized over the past month to right around $50 per barrel. However, that stability might not last long as there are signs on the horizon that the oil industry could be in for another leg down. That has some analysts suggesting that oil could hit $30 per barrel before rebounding later this year.
In the International Energy Agency’s, or IEA, monthly report released this week it said it sees near-term trouble for oil prices. According to the Agency, its concern is that the U.S. might soon run out of spare storage capacity, which will put pressure on the price of oil this spring. The report noted that “on the face of it, the oil price appears to be stabilizing. What a precarious balance it is, however.” The report then went on to note, “[B]ehind the facade of stability, the rebalancing triggered by the price collapse has yet to run its course, and it might be overly optimistic to expect it to proceed smoothly.”
Those aren’t exactly encouraging words for oil executives or energy investors. It’s leading to some dire short-term predictions for the oil price. For example, Goldman Sachs’ (NYSE: GS ) president, Gary Cohn, said he thinks that crude could fall to as low as $30 per barrel this spring as storage capacity tightens up leaving fewer buyers of oil. It’s also not helping matters that demand for oil in the U.S. is lower in the spring as refineries switch over from producing home heating oil to summer blend gasoline. This leads to less demand for oil each spring, which could exacerbate this year’s oil glut with no other outlet for U.S. oil due to the export ban.