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Why Crude Oil Prices May Hit $130 a Barrel in 2017

Ecstrat’s Emad Mostaque explains why he thinks crude oil prices are heading toward $130 a barrel. He speaks with Bloomberg’s Alix Steel and Scarlet Fu on “What’d You Miss?

11 Comments on "Why Crude Oil Prices May Hit $130 a Barrel in 2017"

  1. BC on Thu, 22nd Oct 2015 7:54 pm 

    $130 oil is equivalent to US gasoline at $4+ and oil consumption to GDP of 5%, which has historically ALWAYS resulted in recession and decline in oil consumption and prices.

    In fact, oil consumption to final sales of 3% and growing at a rate faster than GDP has historically been sufficient to result in recession.

    We hit that threshold in 2014, which is why the price of oil crashed and the world is quite likely in recession since late 2014.

    Alix and Scarlet are really cute but also equally clueless, and they aren’t paid to be intelligent or ask intelligent questions, not that there’s anything wrong with that. 😀

  2. idontknowmyself on Thu, 22nd Oct 2015 8:06 pm 

    130$ dollars oil is only possible is government worldwide deposit money directly into people bank account.

    Otherwise we will see a depression with shortage of manufacturing goods because of the lack of demands cause be high consumers debts.

  3. Keith_McClary on Thu, 22nd Oct 2015 10:47 pm 

    “deposit money directly into people bank account.”
    No helicopters? 

  4. johnsonpadilla on Fri, 23rd Oct 2015 10:39 am 

    This is not possible and only in his dream. The only way for oil to reach a ridiculous level of $130 per barrel is if oil supply from the Middle East is disrupted because of spread of terrorism that could affect internally the major producers thereby creating a short supply of oil against demand. Should this happened, producers like Russia, Brazil, The US, Africa will be too happy to produce more to cover for the short supply taking advantages of the opportunity to make bigger profit. Under present condition and with Iran sanctions lifted more oil will be in the market, this even taking into consideration that oil supply from Iraq isn’t stable like before the trouble brought by ISIL.US fracking at present level of $50 dollars per barrel is not viable but with improved technology and ways of oil extraction now available, fracking will be profitable at $60.00 per barrel- meaning, under present condition, oil must not pass beyond fracking profitable limit in order to control supply and once this threshold is passed, supply will far exceed demand. Even at the present condition prevailing in the middle east and price at $50 per barrel, there is this desire by oil rich countries to produce more than their OPEC quota to cover for the lost profit since most of them are economically tied to oil.

  5. penury on Fri, 23rd Oct 2015 11:14 am 

    People seem to find it necessary to imagine perpetual growth as the panacea to all the troubles of the world. However the facts are plain, the world in in a deflationary cycle. This deflation could take centuries to complete. The good times are over, the deflation will affect us all, even as it takes years to unfold. Wars in the ME are the beginning not the end. The mass migration will continue and the death of the petro dollar will continue, and think the impossible there will be no currency strong enough to replace it. So day to day evaluations are meaningless,look at the long term and think deflation.

  6. onlooker on Fri, 23rd Oct 2015 11:52 am 

    It reminds me Penury of the quote I heard “Only economists and the insane believe in infinite growth” haha.

  7. Huckleberry Finn on Fri, 23rd Oct 2015 7:45 pm 

    You are wrong for many reasons
    1) The whole world does not face $130 oil. The oil exporters have strengthening currencies and oil subsidies.
    2) Your recession logic applied when US imported oil at $140 and it was 14 million barrels of it. It can import oil at a far higher price without triggering a recession, if it imports less.
    3) A recession will only bring down oil price if oil demand falls faster than supply.

  8. GregT on Fri, 23rd Oct 2015 8:20 pm 

    Huck Finn,

    You obviously haven’t been paying much attention to what is already occurring in the world. $40/bbl oil is too expensive for economic recovery from the recession that we’re already in.

  9. Huckleberry Finn on Fri, 23rd Oct 2015 10:29 pm 

    $40 is too expensive?
    Based on what?
    We had 5 years of $80 plus oil with the world thriving and now suddenly $40 is too expensive?
    Many countries have $4+ Gasoline (due to high taxes) even now, and it has had no impact.
    Go back to 2002, where idiots thought $20 would induce a recession and there were wrong by a factor of 8.

  10. GregT on Fri, 23rd Oct 2015 11:48 pm 

    “We had 5 years of $80 plus oil with the world thriving”

    The world’s economies are in decline Huck, they are not thriving. Historically, whenever oil has risen above the goldilocks range of ~ $20/bbl in inflation adjusted dollars, our economies have gone into recession. This time is no different.

    Smart people don’t ignore reality, idiots do.

  11. Huckleberry Finn on Sat, 24th Oct 2015 6:47 am 

    That is just a silly graph. We have had 2 recessions there and in between most emerging economies grow at around 8%. In fact Brazil and Russia’s GDP increase with oil prices rather than decrease. Just remember, how stupid you are going to feel in 5 years. I am not going to not waste any breath on you. ByeBye.

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