Commodity Trade Mantra

Posts Tagged ‘Lower Oil Prices’

Making Sense Of The Weakness In Oil Prices

Saudi Arabia was instrumental in exacerbating the oil slump at the end of last year, when it decided at November’s OPEC meeting not to cut production to support the oil prices. The rationale was that shale producers needed a high price to stay in business. Let the oil prices fall and they’ll go bankrupt – along with those who financed them. It hasn’t really worked. Why?

The Illusion that Lower Oil Prices Are Positive

The Oil Head-Fake: The essence of the Oil Head-Fake Dynamic is the inevitable drop in oil prices resulting from a sharp decline in oil demand (i.e. global recession) will trigger disruption of the global oil supply chain that will eventually push oil prices higher than most currently think possible.

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