Wow…oil plummeted over 50% since October and recovered over 24% in 2 weeks.
What is happening? The glut of oil made shelving a lot of new projects – 352 oil rigs where idled just in the last 8 weeks – BP shelved USD20 billion on new investment.
A study of Goldman Sachs showed than USD1 trillion investments in oil are not profitable under USD70.
Also Shale Oil rigs have a fast decadence rate if not continually improved (the second year the shale oil flows decrease by 70%).
And you still need oil, not just for cars – but for everything (for your clothing to the kitchenware).
So this glut automatically creates a shortage for the future.
But also all this could be a fake as there 19x the normal volumes on oil future. That said oil cannot stay at this prices for long.
UPDATE: since the oil move have been initiated by the Saudis that dominate the oil market you have to examine what they want and if that has been achieved:
– Get rid of US shale gas. Not yet achieved – it is seriously endangered, but -due the hedging of positions – their mission has not yet been achieved.
-Get rid of the Assad regime. Russia and Iran are the ones that sell weapon to Syria and they did not back down – mission not yet achieved (if ever)
So, for now, the oil trade is still very dangerous
investorpolitico 