At the top of this post you will find an image of the business section front page from today's New York Times. Six months of relative stability in crude oil prices (red oval) has attracted the attention of the Times. I'm sure a lot of people have noticed this, but I think the situation is about to change.One of my primary reasons is that oil competes with natural gas in power generation. And recent technological advances in natural gas extraction technique have vastly expanded the amount of recoverable gas supplies the word over. This dramatic shift in supply conditions has made itself felt in the natural gas market (middle chart). I think a big drop in oil prices lies dead ahead. I think crude will drop below the $30 level.
I thought majority of the oil goes into vehicles. Infrastructure isn't set up to use natgas yet. prob will take decades, and with natgas prices so unstable, it's a big risk for them to even set up this infrastructure. If you mean generating electricity and use the hybrid or electrical vehicles, then sure... a couple years down the road
ReplyDeleteCarl-
ReplyDeleteIf we get an uptick in the economic condition of the world won't that increase demand for crude? Won't a high stock market mean a high oil price? Your theories seen to be at odds-
Good post. Oil is about to roll over. So is Gold.
ReplyDeleteThanks for posting your outlook Carl!
ReplyDeleteCF - along with Jesse, yours are two of my favorite blogs. NatGas is the "dark horse" that will change the dynamics of the energy economy. The question/challenge is when.
ReplyDeletedid you see the cover of TIME: "JOBS".
ReplyDeleteIs it a sig of the end of rising unemployment?
Calling from Sweden. Carl has improved my knowledge and understanding how the financial markets works a lot! I do better and better trades after nine years of learning. Thanks Carl. I´m very glad to have found you.
ReplyDeleteg. Jesse, who is that person?
I finally read your book. Just brilliant. Thanks.
ReplyDeleteCarl, IMHO,judging from the tone of NYT on crude, seems like the public is very comfortable with price at 70-90 range... maybe the contrarian view is the public will soon find out crude is going much higher again and they will feel very nervous and uncomfortable. Afterall the market suppose to do something uncomfortable... and going lower seems too easy.
ReplyDelete