Stubborn Energy Prices?

  • JJ Hornblass
  • December 4, 2012
  • 1

Some interesting market color that crossed the news wires last night:

The ingredients are in place for a massive oil price collapse — massive production, low breakeven costs, low financing costs, tight capacity — BAML says, seeing the possibility of $50 oil within the next 24 months. But with North American production costs relatively high and Saudi Arabia capable of decimating U.S. producers if it stepped up production enough, FT’s Ed Crooks sees little chance of a dent in prices. 

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One thought on “Stubborn Energy Prices?

  1. There are definitely contrarians out there, who believe oil prices are unrealistically high and who predict a collapse “real soon.” But one has to ask how likely such a collapse in price is, and, more importantly, how long it would last if it did happen.

    Given the volatility of markets in general and the oil market in particular, a sudden dive in prices is not impossible, but if the steep drop is immediately followed by a steep spike, who benefits?

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