{"id":11455,"date":"2015-08-25T06:57:19","date_gmt":"2015-08-25T11:57:19","guid":{"rendered":"http:\/\/olduvai.ca\/?p=11455"},"modified":"2015-08-25T06:57:19","modified_gmt":"2015-08-25T11:57:19","slug":"why-the-20-oil-predictions-are-wrong","status":"publish","type":"post","link":"https:\/\/olduvai.ca\/?p=11455","title":{"rendered":"Why the $20 Oil Predictions are Wrong"},"content":{"rendered":"

Why the $20 Oil Predictions are Wrong<\/a><\/h3>\n

Deja Vu<\/strong><\/p>\n

As the price of West Texas Intermediate (WTI) retests the $40 per barrel (bbl) mark, some pundits are again calling for WTI to fall to $15 or $20\/bbl. The same thing happened earlier in the year when crude prices tested $40. Lots of people predicted $20, the price went to $60, and the $20 crowd went quiet for a while. Well, they are back:<\/p>\n

Why oil prices could sink to $15 a barrel<\/a><\/p>\n

\u201cThere is no evidence whatsoever to suggest we have bottomed. You could have $15 or $20 oil \u2014 easily,\u201d influential money manager David Kotok told CNNMoney. \u201cI\u2019m an old goat. I remember when oil was $3 a barrel,\u201d said Kotok, whose clients include former New Jersey Governor Thomas Kean.<\/p><\/blockquote>\n

Yes, and you could get a candy bar and soda for a nickel. But I will bet him $10,000 we don\u2019t see WTI at $15\/bbl unless he has access to a time machine. Today I want to address this argument. I got into a debate on this topic with a person yesterday, and I am seeing enough of these predictions that I thought it warranted addressing. Again. The $20\/bbl argument goes something like this: Crude oil inventories are extremely high. U.S. oil production keeps rising. Demand is falling. Something has to give.<\/span><\/p>\n

Crude Inventories Did Rise<\/strong><\/h4>\n

The problem is that this conventional wisdom argument is wrong on 2 counts. It is true that crude oil inventories are high. Last week there was a surprise build in U.S. crude oil inventories. Analysts were expecting inventories to fall \u2014 which they have been doing since April \u2014 but instead crude inventories rose by 2.6 million barrels. Following this week\u2019s release of the Weekly Petroleum Status Report announcing the surprise build in inventories, I saw more than one person claim \u201cWe are definitely going below $40\/bbl today.\u201d<\/p>\n

…click on the above link to read the rest of the article…<\/p>\n

 <\/p>\n","protected":false},"excerpt":{"rendered":"

Why the $20 Oil Predictions are Wrong Deja Vu As the price of West Texas Intermediate (WTI) retests the $40 per barrel (bbl) mark, some pundits are again calling for WTI to fall to $15 or $20\/bbl. The same thing happened earlier in the year when crude prices tested $40. Lots of people predicted $20, […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_monsterinsights_skip_tracking":false,"_monsterinsights_sitenote_active":false,"_monsterinsights_sitenote_note":"","_monsterinsights_sitenote_category":0,"footnotes":""},"categories":[2,3],"tags":[8427,592,1775,595,596,1451,895],"class_list":["post-11455","post","type-post","status-publish","format-standard","hentry","category-economics","category-energy-2","tag-crude-inventories","tag-oil-price","tag-oil-price-collapse","tag-oil-production","tag-oil-supply","tag-west-texas-intermediate","tag-wti"],"_links":{"self":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/11455","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=11455"}],"version-history":[{"count":1,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/11455\/revisions"}],"predecessor-version":[{"id":11456,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/11455\/revisions\/11456"}],"wp:attachment":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=11455"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=11455"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=11455"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}