I see on the BBC site that the prediction for a barrel of oil for the end of this year and next year. Could drop below $20 a barrel.


What price do you think it will stop at? What's your take on why it is happening?


John933

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To buy petrol in Europe. Pull up at station. Wait. Get out a 20 Euro note, then ask someone to fill up the bike. Give person money. Ride away. Simple.

I was deliberately conservative in my prediction in the link below.
http://www.horizonsunlimited.com/hub...n-2016-a-85019

Why it is happening is clearly expressed by plenty of commentary in the media.

OPEC is currently pumping about 32m barrels per day when it's avowed aim, currently, is 30m.

No country will cut it's own oil production in order to raise the price; so supply exceeds demand and will continue to do so, because:-

Chinese economic activity is dropping.

Most of the rest of the world economies are deflating, not inflating.

Iran is about to start exporting their oil, to add to the glut.

It has been commented that Saudi Arabias' cost of production is $1 per barrel so they have scope to see out the reducing prices.

Saudi A will continue as they are right now in order to drive other producers out of the market.

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Dave

Gentlemen:

"The two greatest successes of U.S.-Saudi cooperation, coordinated support for the Afghan jihad against Soviet occupation and the Gulf War, (both) created the conditions needed for the September 11, 2001, attacks."

"Saudi Arabia was the top destination for U.S. arms in 2014, and the trade is expected to grow 52 percent in 2015 to $9.8 billion."

Two quotes found here:
U.S.-Saudi Relations - Council on Foreign Relations

IMHO:

Knowing that the Saudi's, have always had their own agendas, one of which is to maintain the status quo ie: royals ruling Saudi Arabia with the able assistance of the the followers of Sheikh Mohammed Ibn Abdul Wahab, conservative Sunni Islam.

Profit alone cannot insure the status quo for the royals - without weapons.
And, weapons (circa 2016) with dwindling importance as drones/robots/space based technology etc come online, still require substantial manpower and expertise. Until now, and perhaps continuing through this decade, the United States has been doing the heavy lifting - all that is required to keep the royals in power, in return for the Saudis investing oil profits in U S concerns, and playing American baseball with pice of oil.

Recent events have shaken the Saudi belief that the United States is an able partner and agreements dating as far back as the 30s, ARAMCO, 1948 etc have been covertly renegotiated and the current price of oil has much more to do with this change than with the profit motive or a potential profit
motive .

xfiltrate

I restricted my earlier post to the regional issues of the middle east based on the national players therein.

As you indicate, there are other "great games" in play, and these are ones that have been discussed elsewhere.

Saudi Arabia wishes to demolish the production of oil by means of fracking.
How far they will go to achieve this remains to be seen.

Saddam was deposed from power because he was going to trade Iraqi oil outside of the petrodollar arrangements.

Gaddafi, the same, + he was interested in establishing some form of African currency based on a gold standard.

Russia may be interested in some kind of similar concept for trading oil with, say, China (and anyone else who might wish to trade with them).

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Dave