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U.S. oil prices could sink to $50 a barrel at some point over the next two years, according to analysts at Bank of America Merrill Lynch.
The drop in U.S. oil prices would likely be temporary, caused by the difficulty in moving huge amounts of new oil from places like North Dakota's Bakken shale or Texas' Eagle Ford to market. Already, all the new production has led to a glut of oil in the region.
"No one expected output to grow by a million barrels per day last year," Francisco Blanche, Merrill's head of commodity research, said at a press briefing in New York. "No one."
As a result, oil has been accumulating in Cushing, Okla. -- home to the convergence of several pipelines and dozens of oil storage tankers that acts as the delivery point for the most commonly quoted U.S. oil price, West Texas Intermediate.
This is a great thing...prices of everything will follow...
Yes, a lot of things are tied to price of gas, including groceries. However the article did mention that although the price of oil will drop, the price of gasoline is not likely to drop as much.
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Edit: it definitely will not sink that low...not to 50/barrel
Like I mentioned, if it sinks too low, it becomes unprofitable to extract, and then then output decreases, and the price goes up. It will eventually find its place.
Yes, a lot of things are tied to price of gas, including groceries. However the article did mention that although the price of oil will drop, the price of gasoline is not likely to drop as much.
Like I mentioned, if it sinks too low, it becomes unprofitable, and then then output decreases, and the price goes up. It will eventually find its place.
But even if it settles @ $70-75, that's good enough for me
This would be a great thing, but I wouldn't hold my breath. Oil companies will find some excuse to keep the price high. You're always hearing the supply and demand BS from oil companies while they make record profits every quarter
This would be a great thing, but I wouldn't hold my breath. Oil companies will find some excuse to keep the price high. You're always hearing the supply and demand BS from oil companies while they make record profits every quarter
Oh brother.
Not the "record profits" garbage again. Sigh.
Where were you when they were having to merge together in the 1980's and 90's as they faced bankruptcy?
Those mergers created the largest companies in the world, which should make what amount of profit in total dollars one might wonder? Forget that thier actual profit margins are roughly half the amount of federal and state tax you pay per gallon.
U.S. oil prices could sink to $50 a barrel at some point over the next two years, according to analysts at Bank of America Merrill Lynch.
The drop in U.S. oil prices would likely be temporary, caused by the difficulty in moving huge amounts of new oil from places like North Dakota's Bakken shale or Texas' Eagle Ford to market. Already, all the new production has led to a glut of oil in the region.
"No one expected output to grow by a million barrels per day last year," Francisco Blanche, Merrill's head of commodity research, said at a press briefing in New York. "No one."
As a result, oil has been accumulating in Cushing, Okla. -- home to the convergence of several pipelines and dozens of oil storage tankers that acts as the delivery point for the most commonly quoted U.S. oil price, West Texas Intermediate.
And I fully expect GM's management to decide to drop all efficiency plans and produce 10 different kinds of 6000 lb SUV's with 600 HP under the hood. And then when fuel prices go back up and sales drop they'll apply for a federal bailout and blame the union.
Wash, rinse, repeat.
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