For first time in years, the world is producing more oil than it needs - News and Current Events | futures.io
futures.io futures trading
 

Go Back   futures.io

> Futures Trading, News, Charts and Platforms > Traders Hideout > News and Current Events


For first time in years, the world is producing more oil than it needs
Started:June 6th, 2012 (08:02 PM) by kbit Views / Replies:178 / 0
Last Reply:June 6th, 2012 (08:02 PM) Attachments:0

Welcome to futures.io.

Welcome, Guest!

This forum was established to help traders (especially futures traders) by openly sharing indicators, strategies, methods, trading journals and discussing the psychology of trading.

We are fundamentally different than most other trading forums:
  • We work extremely hard to keep things positive on our forums.
  • We do not tolerate rude behavior, trolling, or vendor advertising in posts.
  • We firmly believe in openness and encourage sharing. The holy grail is within you, it is not something tangible you can download.
  • We expect our members to participate and become a part of the community. Help yourself by helping others.


You'll need to register in order to view the content of the threads and start contributing to our community. It's free and simple, and we will never resell your private information.

-- Big Mike
     

Reply
 
Thread Tools Search this Thread

For first time in years, the world is producing more oil than it needs

Old June 6th, 2012, 08:02 PM   #1 (permalink)
Elite Member
Aurora, Il USA
 
Futures Experience: Advanced
Platform: TradeStation
Favorite Futures: futures
 
kbit's Avatar
 
Posts: 5,847 since Nov 2010
Thanks: 3,281 given, 3,327 received

For first time in years, the world is producing more oil than it needs

Remember when, a few short months ago, the whole planet was panicked about cripplingly high oil prices? Thatís changed in a hurry. Crude prices are now plummeting. Oil in London is trading for $96 per barrel, way down from $126 back in February.

The big reason why: supply and demand. The world is pumping out more oil and other liquid fuels right at the moment when the global economy is starting to slacken and people are using less of the stuff. Matthew Phillips of BloombergBusinessweek offers up this great chart:

So where did this extra oil* come from? Some of it was tapped from new unconventional supplies in the United States and Canada. But OPEC countries have also been cranking up crude production in the past year. Iraq is slowly rebuilding its oil industry. And Saudi Arabia has added about 1 million barrels per day in the past year, to the point where itís now pumping out more oil than it has in the past three decades.

Meanwhile, global demand as falling. As my colleague Steve Mufson reports, according to Barclays Capital, most of the growth in global oil demand in recent years has been coming from just four countries: Saudi Arabia, China, India, and Brazil. And those last three countries are all slumping. That means there are fewer takers for that extra oil than was expected.

Add that up, and many analysts are now predicting that crude prices will keep falling this year ó possibly as low as $90 per barrel. From a historical point of view, thatís still very high. But from the perspective of the U.S. economy, that could provide a small stimulus as gasoline prices keep falling. According to recent estimates by Macroeconomic Advisers, a $10 drop in the price of oil could boost U.S. gross domestic product by 0.2 percentage points.

One caveat, though: Itís still entirely possible that oil prices wonít keep falling. Stuart Staniford notes that Saudi Arabia could decide to cut production in the near future. Remember, most OPEC countries need relatively high oil prices to pay for the domestic spending programs theyíve recently put in place to placate protestors. And thereís always the possibility of a surprise plot twist. Negotiations with Iran could break down. Or Europe could suddenly fix its problems

But thatís just another way of saying that weíve reached an era in which oil prices are extremely volatile ó and difficult to predict. Which is why Kevin Drum wonders if the United States would be better off with some sort of variable tax on oil that kept prices at a steady (but fairly high) price. That would allow the country to slowly but steadily reduce its reliance on crude, rather than lurching from panic to complacency and back to panic every time thereís a sudden kink in the world oil markets.


For first time in years, the world is producing more oil than it needs - The Washington Post

Reply With Quote
     
The following user says Thank You to kbit for this post:
     

Reply



futures.io > Futures Trading, News, Charts and Platforms > Traders Hideout > News and Current Events > For first time in years, the world is producing more oil than it needs

Thread Tools Search this Thread
Search this Thread:

Advanced Search



Upcoming Webinars and Events (4:30PM ET unless noted)
 

NinjaTrader 8: Features and Enhancements, Tips and Tricks

Dec 6
 

Al Brooks: Stop Losing when a Good Trade goes Bad, Correcting Mistakes

Elite only
 

Trading Technologies: Algo Design Lab hands-on

Dec 13
     

Similar Threads
Thread Thread Starter Forum Replies Last Post
Cyber attacks could wreck world oil supply kbit News and Current Events 0 December 8th, 2011 01:04 PM
The end in 25 years. One world currency. Cloudy Currency Futures 4 September 20th, 2011 05:49 PM
ĎLeaní 7 Years for World Economy: Finance Minister Quick Summary News and Current Events 0 August 29th, 2011 05:00 AM
What is going on here (my strategy isn't producing orders) ???? jmejedi NinjaTrader Programming 5 June 7th, 2011 08:11 PM
Banks Ease Lending Standards for First Time in Four Years Quick Summary News and Current Events 0 August 16th, 2010 04:20 PM


All times are GMT -4. The time now is 04:08 AM.

Copyright © 2016 by futures.io. All information is for educational use only and is not investment advice.
There is a substantial risk of loss in trading commodity futures, stocks, options and foreign exchange products. Past performance is not indicative of future results.
 
no new posts

Page generated 2016-12-06 in 0.07 seconds with 19 queries on phoenix via your IP 54.163.147.69