How much is the real price of oil?

Discussion in 'Finance' started by Mans, Apr 16, 2016.

  1. Mans

    Mans New Member

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    May you know, the price of oil rose to $100 per barrel a few years ago and afterward the price dropped down to $ 45 in recent months. The questions are these:

    -What caused the price of oil dropped down suddenly (during one year or less)?

    -How much is the real and fair price of petroleum?

    - Will the price of oil raise in the near future again?

    -How much it will be increased?
     
  2. Margot2

    Margot2 Banned

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    The ppb went down because there is a glut of oil on the market..

    When the ppb climbed everyone and there cousins were drilling for oil. Its really that simple.
     
  3. Zorroaster

    Zorroaster Well-Known Member

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    In market terms, there is no 'real' price of oil. When you put your house on the market, you will be able to sell it for what buyers are willing to pay.This is its market value, and the only objective measure of its price. Its real value to you is a subjective evaluation.
     
  4. Margot2

    Margot2 Banned

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    And if there are a glut of houses available, the price goes down.
     
  5. jdog

    jdog Banned

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    Price is always a function of supply and demand. Oil price was artificially inflated for years by production controls and political driven foreign policy. The artificially high oil price made extraordinary technology to extract oil cost effective and the new technology became more cost effective as time went on.

    As the economy in the US faltered post 2008, people abandoned their 12mpg SUV's in favor of 30+mpg crapboxes that they could afford which pushed demand lower at the same time production was ramping up.

    Now oil producing countries are backstabbing each other to gain market share as new production from Iran begins to come online.

    There is still some manipulation going on as oil is being stockpiled in tankers and storage facilities, but they are quickly reaching capacity.

    I think that you will see oil below $30 at some point in the next couple of years, providing there is no war that upsets the status quo.
     
  6. Baff

    Baff Well-Known Member

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    A trade war. Saudi vs America.

    Saudi released it's reserves and dumped oil on the market to knock out it's more expensive to produce competition. US shale.
    Saudi wants to be the worlds biggest oil producer again.

    The price stays low until the Saudi's raise theirs.
     
  7. Mircea

    Mircea Well-Known Member

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    Larger supply, lower demand and the lack of speculation.

    Absent speculation, probably close to what you're seeing now.

    Yes, once speculators have cash to being speculating on oil and gasoline futures.
     
  8. Margot2

    Margot2 Banned

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    You don't know what you're talking about.

    Saudi ARAMCO is the world's largest and most efficient oil company.
     

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