Oil could crash to $10 a barrel, warn investment bank bears

GURPS

GURPS

INGSOC
PREMO Member
Oil could crash to $10 a barrel, warn investment bank bears
Petrol prices could fall back to levels last seen in 2009 as major banks say there is no bottom in sight for the world's lopsided market


Brent crude has now slipped to a fresh 12-year low of $30.41 a barrel, while West Texas Intermediate - the US benchmark - is trading at $29.93 - a level last seen in December 2013. Analysts warned the oil market remains fundmentally out of balance as record over-supply and stagnant demand weighs on traders

Standard Chartered said there was no bottom in sight until "money managers in the market conceded that matters had gone too far".

"Given that no fundamental relationship is currently driving the oil market towards any equilibrium, prices are being moved almost entirely by financial flows caused by fluctuations in other asset prices, including the dollar and equity markets," said Standard Chartered.

Oil last slumped to $10 during the height of the Asian financial crisis in 1998. A $10 world would lead to petrol prices falling back to 86p-per-litre, said Simon Williams at RAC.
 
H

Hodr

Guest
Time to change vacation plans from flying cross country to driving. Always wanted to see that giant ball of yarn.
 
stgislander

stgislander

Well-Known Member
PREMO Member
On the flip side... how high does the price of a barrel just up if shooting breaks out between Saudi Arabia and Iran?
 
Tilted

Tilted

..
Best guess from whoever cares to offer one: Did WTI find an intermediate-term bottom on Tuesday?

Also, I'd note that WTI is above Brent. :faint:
 
Larry Gude

Larry Gude

Strung Out
stgislander said:
On the flip side... how high does the price of a barrel just up if shooting breaks out between Saudi Arabia and Iran?
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I'm not aware of any argument ksa is going fight anyone. Why when you have the best military in the history of the world at your disposal?
 
itsbob

itsbob

I bowl overhand
$10 a barrel will leave a lot of economies in ruin, we be paying $1 a gallon for gas but most counties depend on oil revenue..
 
Larry Gude

Larry Gude

Strung Out
Tilted said:
I don't recall, but I'm guessing I lost it? :lol:

Don't tell me what it was yet, give me your best guess as to whether I want to remember it. IOW, is it something you think I'd want to welch on? :smile:
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You proffered something on the long terms prospects of oil getting below $40. I remember it as a short bet, would I be happy to get oil at $40 on the prospect of it getting below that in the coming months. I recall not wanting to touch it, thinking $40 was gonna be about it.

So, no, you didn't lose. Neither did I because we both passed on it. :buddies:
 
Larry Gude

Larry Gude

Strung Out
itsbob said:
$10 a barrel will leave a lot of economies in ruin, we be paying $1 a gallon for gas but most counties depend on oil revenue..
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It was dumb to allow oil to get that high and stay there in the first place and those nations were placing their lives on the long term bet of a product being sold for WAY more than it's costs. So, now, we deal with the risk of real problems of those economies collapsing. Mexico, Venezuela, Russia. The Middle East.

One of the bets that have tended to lead to war over the centuries has been one of resources and how long they should last vs. the unpredictable future. Hitler wasn't ready to go to war in 1939 but he judged he was in better shape than everyone else to stop him and he figured better to go at half strength and everyone else at that, or less, than get to full strength and face everyone else more prepared to face it, especially the Russians.

What if Iran gets to the point of real pain? There are reports of growing tension in KSA. What if they see more war as a way to relieve that pressure? Russia would damn sure like to see energy go back up. It's not hard to see desires for limited conflict that would raise prices but then spiral out of control when blood starts getting spilled. Turkey. All the competing factions in Syria. A couple of America spec ops folks get captured because someone betrays them. They get executed. An aircraft incident between a Russian and US fighter?

It is a LONG way to November and even if we make it that far without a conflagration, what then? Bernie? Hillary? Donald Trump deferring to experts, generals trained to fight, not make national policy? The best thing that can happen now is Obama to get out people the hell out, now. If Iran and KSA are gonna come to blows, do we really want US troops in that again?
 
H

Hodr

Guest
GURPS said:
does anyone think the next 'bank bailout' will be over OIL Loans ?

Big banks brace for oil loans to implode
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Not that I doubt this outcome, we do love to bail out the banks. But, aren't loans supposed to be collateralized? And if they seize the property and its worthless, can't they sue the companies?

It's not like the oil industry is awash with mom-and-pop outfits, these guys could afford to cover their debts if anyone made them.

But as always, big businesses do not actually have to account for their bad decisions; the taxpayer can always be counted on to pay the bill.
 
Gilligan

Gilligan

#*! boat!
PREMO Member
Hodr said:
It's not like the oil industry is awash with mom-and-pop outfits, these guys could afford to cover their debts if anyone made them.
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?? There are thousands of small companies in the petro industry. Many thousands. Working in the gulf area as I do, I've seen the economic carnage of the recent downturn up close. It's getting ugly.
 
Gilligan

Gilligan

#*! boat!
PREMO Member
Larry Gude said:
Yup. Feast or famine.
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Many of them were impacted pretty bad during the shutdown period after the BP disaster...had gotten well again only to hit this. Some of our clients operated crew and supply vessels and those are all being laid up.
 
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