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Page added on April 19, 2017

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The Price Of Oil Might Soar This Year

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Well here’s something totally and definitely unexpected: oil prices are forecasted to rise this year. Nobody saw that one coming. No one. Uh uh. Not a single person. Ever.

Oil is expected to rise by $10 a barrel in 2017, according to analysts at Citigroup, reports CNBC. In a note published earlier this week, the analysts said that

“With a continuation of the OPEC/non-OPEC producer deal in the second half of 2017 and the expected associated inventory draw-down, we expect oil prices to move above $60 a barrel by the second half of the year.”

The CNBC story notes that OPEC agreed to remove a supply glut by slashing 1.2 million barrels per day from January to June. Russia, including eleven other non-OPEC countries, agreed to limit supply as well.

Recall everything we just saw at the New York Auto Show. The gas-burning Dodge Demon and SUVs and crossovers that extended as far as the eye could see. Countless automakers are either ramping up SUV and crossover production or introducing new, large-sized models. Because that’s what people are into buying right now.

If you need further proof, just look at the rise and fall of Prius sales. Terrible now, amazing in 2009, 2010 and 2011. In 2011, The New York Times reported that used fuel-efficient cars actually turned a profit because demand was so high.

Things don’t look good for FCA in particular. The company recently killed off two mid-sized sedans—the Chrysler 200 and the Dodge Dart—and seem to be focusing on selling large trucks and SUVs.

In January of last year, FCA CEO Sergio Marchionne said that the company would slow Alfa Romeo’s reinvention and expand Jeep, truck, crossover and SUV lineups. He has also made clear that he won’t invest in expensive, alternative technologies if there are cheaper ways to comply (like buying regulatory credits.)

All of a sudden those EVs can’t seem come soon enough.

jalopnik.com



7 Comments on "The Price Of Oil Might Soar This Year"

  1. Boat on Wed, 19th Apr 2017 9:45 pm 

    Hmmmmmmmm, so even after a huge cut in oil production stock piles of inventory still show small gains. The US has added 900,000 bpd since July. Unless OPEC continues the cuts and then cuts enough to compensate US production, oil prices will drop due to higher stockpiles.
    If OPEC decides to resume production look for $30 per barrel oil.

  2. GregT on Wed, 19th Apr 2017 10:02 pm 

    Wake me up when prices go south of $20/bbl, like what they were prior to 2002, when there was no oil glut.

    https://www.eia.gov/dnav/pet/hist/LeafHandler.ashx?n=PET&s=RWTC&f=D

  3. joe on Thu, 20th Apr 2017 12:32 am 

    Imo there the whole thing is a scam. They have to sell volume as well, otherwise price rise leads to lower demand. Another scam is property prices, people need homes, they create conditions for lending and then slowly build homes thus competition forces up the price. Greed eventually spins the system out of control though, causing the next recession. Bumpy Plateau.

  4. GregT on Thu, 20th Apr 2017 12:52 am 

    “Greed eventually spins the system out of control though, causing the next recession.”

    At the root of the problem lies a monetary system that requires exponential growth. As long as currency is allowed to be created out of thin air, with interest attached, the problem will not go away until the system collapses in on itself.

    Fiat Money 101.

  5. rockman on Thu, 20th Apr 2017 7:47 am 

    One difficulty with judging production cuts by looking at inventory changes during the spring is the historic stockpile builds to handle increased refinery demands to satisfy increased summer consumption of motor fuels. 10% to 20% increases are not uncommon:

    http://ritholtz.com/2012/05/crude-oil-inventories/

  6. Stoned Floating Joe on Thu, 20th Apr 2017 10:20 am 

    The price of oil is due to soar every year, and has been due for over 30 years and counting. This is the rah-rah! talk of cheerleaders building up the emotions for the home team.

    Predictions are for people who have something to gain by spinning a particular angle, and for people whose arrogant ignorance is larger than their capacity to learn from experience.

  7. AFDF on Fri, 21st Apr 2017 8:19 am 

    If the state wants to continue to exist, it must seize control of the media and the billboard. The billboard in this case is the price of gasoline so prominently displayed in towns and cities.

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