oftwominds-Charles Hugh Smith: I Call BS on Projections of a Decade of $20/Barrel Oil.
The ability of oil exporters to trigger a short-term collapse in price does not automatically translate into an ability to control the financial conflagration such a crash ignites.
My BS detector went off when two stories with similar headlines touting $20/barrel oil were published on the same day. Color me skeptical, but it’s almost as if mere $40/barrel oil is no longer enough to get the blood flowing, so both stories blared the more extreme $20/barrel price point.
Neither story depicted $20/barrel oil as a brief spike–rather, each presented a future of sub-$50/barrel oil that could last for years or even a decade or longer, matching the period of cheap oil that ran from the mid-1980s to the late 1990s.
I have no problem with the idea that geopolitics is driving supply excesses, the goal being to crash the oil revenues of enemies–that’s part of my Oil Head-Fake scenario: The Oil-Drenched Black Swan, Part 4: The Head-Fake Disruption Ahead (December 4, 2014).
The idea that global demand is stagnating is also common sense, given that the global economy is stagnating.
