A Clear Short-Term Path for Oil Prices
Predicting how oil will move in price in 2017 is about as tricky as it could be. However, it is worth noting that predicting the future of oil prices in the modern day energy market has been much more difficult than it was in the past. There are some things that can be learned from the current market that may indicate, at least in the short-term, where oil is going in terms of price and how investors can position themselves to be profitable.
The first thing to remember is it is unlikely that prices will return to the levels they were in the past. Not too long ago, oil was going for around $145 per barrel. This was great for oil producing countries, but extremely difficult for consumers. Some people may think that oil is headed that way, and there is good reason for this. Some OPEC countries like Libya, Nigeria and Venezuela, are enduring difficult financial situations. These counties would need oil prices in the $140 to even $180 per barrel to have any positive impact on their economy. However, the remainder of OPEC knows that this isn’t a viable option.
However, that doesn’t mean that prices are going to remain static. Prices for a barrel of oil have already begun to rebound from their $20 lows. While it’s unlikely that prices will ever return to those lows, a good price point is in the $70 to $80 range. Some experts have called for prices to stay in the $50 range. However, Saudi Arabia has agreed to lower daily production levels. This means less oil flooding the market and this has already caused an upward trending in crude oil barrel prices. When reserves get a bit lower, in the absence of some future geo political or weather related event, prices will likely tick up a small bit more.
A person can check multiple online details, but most of these resources will tell the same story. Dramatic rises or falls in oil prices don’t look quite likely. A more stabilized oil market is what many experts believe the market is headed for. While it may not last forever, energy market investors may have a clear path on how to proceed for the future, even if it is a short-term position.