In early January, the average price for a barrel of oil was $63. Yesterday the price closed at $28.70. Word on the street is that the price may go as low as $20/barrel, soon, and stay there for a while. Why? Because the Saudis and Russians have oil-pumping fever. They’re pumping as much oil as fast as they can. And that’s producing a global surplus of oil chasing buyers who don’t want it. According to IHS Markit VP and head of oil markets Jim Burkhard, “The last time that there was a global surplus of this magnitude was never. Prior to this the largest six-month global surplus this century was 360 million barrels. What is coming will be twice that or more.” The price of oil has crashed–and unless the Saudis and Russians let up, the price will stay crashed for some time to come.
In early January, the average price for a barrel of oil was $63. Yesterday the price closed at $28.70. Word on the street is that the price may go as low as $20/barrel, soon, and stay there for a while. Why? Because the Saudis and Russians have oil-pumping fever. They’re pumping as much oil as fast as they can. And that’s producing a global surplus of oil chasing buyers who don’t want it. According to IHS Markit VP and head of oil markets Jim Burkhard, “The last time that there was a global surplus of this magnitude was never. Prior to this the largest six-month global surplus this century was 360 million barrels. What is coming will be twice that or more.” The price of oil has crashed–and unless the Saudis and Russians let up, the price will stay crashed for some time to come.