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semi_infinite

12/04/15 12:48 PM

#11595 RE: DewDiligence #11594

My old company looked at this issue, oil and gas price predictability, a long time ago for the NPC. We concluded that the only thing predictable was volatility. IE the sharper the rise, the further the subsequent fall and vice versa. There are fundamental limits to the fall or rise of course - the marginal cost of over or under production. As for geopolitical risk in Barron's article, who knows. The ME has pretty much blown up and it hasn't impacted supply. A decade ago, I thought west Africa is the tinder box and IMO that risk has receded. Venezuela has a lot of excess capacity if their politics revert away from communism. Now there are non ICE options and the cost of non ICE options come down 7%/yr.

OakesCS

12/04/15 11:41 PM

#11601 RE: DewDiligence #11594

Yup, $70/bbl isn't going to happen next year. Much of the Barron's article smacked of "technical analysis" and a lot of wishful thinking regarding Putin. Putin is getting along fine in Russia by blaming bad stuff on the US and ISIS and doesn't give a rat's rear end about Russia's crippled economy.

btw, I'm in the $45-55/bbl camp for end 2016.