Will crude oil prices continue to decline?

Question

My feeling has been that oil prices have been driven by speculation and fears in the Middle East. As the market becomes desensitized to violence in the Middle East and investors begin to realize the true relationship between oil supply and its demand, will the market efficiently reflect this truth?

Answer 1

Demand has to drop.

Answer 2

We'll see $100/bbl if the Fed raises the federal funds rate quickly enough. It should be below $100 now. And someone explain to Don C that when product prices rise, gasoline retailers' margins are squeezed. True enough gasoline prices will decline more slowly than crude prices but it's a highly fragmented industry, particularly at the retail level.

Answer 3

You're right. Oil speculation is even more hyper than the NYSE.

I think it will come down for several reasons:

Summer driving is almost over
Iraq is slowly coming on board
The gulf oil rigs are almost at full speed again after the storms in the Gulf of Mexico.

That said, I don't know if we'll sink below 60-dollars a barrel again, but maybe. Good luck.

Answer 4

Bingo ! Speculators are really the culprits that control prices.

No, they will go up everytime there is a storm or the Middle East gets into trouble.

The only thing we can do is insist speculation be abolished-I think it's the same as insider trading and should be a crime. Also, take it off the commodities market.

Answer 5

highly doubt it. i drive a semi, and America does not see behind the scenes. those guys in the mideast are now seeing that america is truly %100 dependent on oil. and now, i think no matter what happens, whether it will go down or not, America has already proved that it is willing to pay and pay and pay for it. We as americans, have made no real honest effort in trying to severely cut down on use. we keep buying these gas guzzler cars while there are plenty other alternatives, etc. And unless trucks find a totally alternate method of running.. for instance, i drive 3500 miles a week, and that costs me 200 gallons for every 1000 miles i run. i use 700 gallons a week... multiply that times about a million or two trucks... and since america is totally deendent on us trucks, now u know why prices for everything are soaring.. i guess i strayed from the question, i get really intense over american politicians and FMCSA running over truckers

Answer 6

Oil prices will be at or around $5 in the next year or higher. The oil companies and politicians will make sure they get every dime out of us they can or as much as the market will allow. We could be using water as a fuel today, but that would make us "energy independent" or we could be driving slower and saving 15.6 % of the fuel we use. I saw a vehicle at the US Army Transportation School in 1965 that used water and a battery for power. It was to be the new vehicle type for all federal agencies. It just disappeared.

Answer 7

They will recede back to about 40$ a barrel according to the OPEC oil minister from Saudi Arabia.
I believe they think it's in their best interests as well as the rest of the world to have stable oil prices.
He stated if oil goes too high it would be detrimental to their security, and would cause massive investment in other sources of energy. Something they don't want. They believe it is their only way to keep prestige and political clout.
I think the Saudis are starting to realize what would happen if radical Islam overthrows the crown.

Answer 8

Once the speculators have filled every available container in America with the oil they've taken possession of, I expect a big price break - and it will happen all at once, just like all the other big price breaks on commodities.

Answer 9

Maybe to some extent. But the fact is, oil is just plain running out, and for the most part the prices are only going to rise until we run out of it completely and are forced to switch to other forms of energy.

Answer 10

Not if the Oil Company CEO's can help it.