applied know how
Oil prices continued their rally this week, after an 8% surge on Friday 30 January.
As some traders try to identify the bottom in oil prices, Morgan Stanley warns that “small crude oil rallies can occur, but are likely limited and unsustainable.”
Data from Baker Hughes last week showed that US oil rigs posted a weekly decline that was the most since the drilling company started collecting the data.… Read more
While today’s pricing is low… See my previous post, tomorrow’s Oil pricing will inevitably rise, and there will be accompanying spikes in the pricing.
Why?
The answer is Simple demand-supply economics.
There is no steady equilibrium in Oil production. Oil is a finite commodity and the wells which produce oil, tend to produce less oil each year. While demand tends to increase by a modest 1-1.5% per year (around 1 million barrels a day) , without new sources of oil the production of oil declines by around 6% per year as older wells run dry ( around 5.5 million barrels a day).… Read more
I’ve recently posted about oil – here – where I explored the different pressures on oil price beyond pure supply and demand. As a follow up it remains insightful to consider that oil supply and demand could play only a small role in oil pricing through 2015… But that’s what one Oil commentator recently suggests.
Before explaining more , why am I focusing on oil?… Read more
So who are the big winners on the swings and losers on the roundabouts of the current oil price declines- the only local swings/roundabouts trade off is in Malaysia where the loss in oil export revenue will be partly offset by a reduction in petrol and fuel oil subsidies.
Obviously buyers are winners and sellers are losers, but what’s the annualized impact as a percentage of a countries GDP?… Read more