Why are oil prices so low?

Discussion in 'Commodity Futures' started by Laissez Faire, Dec 4, 2014.

  1. Could being the keyword here.
     
    #22     Dec 7, 2014
  2. Sergio77

    Sergio77

    Oil prices are low to avert another financial crisis.
     
    #23     Dec 7, 2014
  3. The last time they were at these levels or lower it was due to the financial crisis and the world economy slowing down.

    Some are now arguing in this thread that oil prices aren't low either. Rather that they have been high preceding this.

    So who knows...

    Lot's of opinions here for sure. :)
     
    #24     Dec 7, 2014
  4. Maverick74

    Maverick74

    The oil to gas ratio has been the norm for 50 years to interpolate value when compared in units of heat rates. And by that comparison oil is "obscenely" overvalued. No conspiracies are really needed at this time...
     
    #25     Dec 7, 2014
  5. Maybe that is true, but what will you say when or if oil prices start picking up again next year? :)
     
    #26     Dec 7, 2014
  6. Maverick74

    Maverick74

    Eventually they will go back up but the ratio between natural gas and oil should fundamentally be within a certain range. So nat gas prices could trade a lot higher and therefore oil prices could go up with them. Ultimately empirical data shows us there is a very strong correlation to oil prices and emerging market growth. So if you buy into higher oil prices then you better be extremely bullish on risk assets and emerging market growth. I'm not quite as bullish and think we might enter another recession before we get the next uptick in the credit expansion cycle.
     
    #27     Dec 7, 2014
    Laissez Faire likes this.
  7. EXavier

    EXavier

    Price wars against US NG companies - slowed global economic growth justifies the aggressive undercutting of competition.
     
    #28     Dec 7, 2014
  8. MPK

    MPK

    #29     Dec 7, 2014
  9. EXavier

    EXavier

    Hey, that's what I would do if I were OPEC
     
    #30     Dec 7, 2014