What You Ought To Know About The Oil Price Rebound

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Most in financial industry are acutely aware of Warren Buffett’s quote “Be Fearful When Others Are Greedy and Greedy When Others Are Fearful”. And as evident from the chart above, perhaps no market has more blood running through the streets right about now than the oil market and all related companies….even countries.

As a result, everyone and their day trading grandmother are looking for a bottom in an attempt to make untold riches when oil prices finally rebound. Oil Investors Keep Betting Wrong on When Market Will Bottom

This mindset leads me to a simple conclusion. There won’t be a strong rebound in oil price anytime soon. This move down appears to be more structural as opposed to technical in nature. Meaning, once oil finds its bottom, it might rebound 10-20% only to fall back and trade within a certain trading range. For many years to come. What gold did since its sell-off in 2012 would be a perfect illustration of that.

In other words, while it is possible oil will have a large rebound after it finds bottom, don’t count on it. Until and unless everyone gives up on oil and looks at it with disgust, it is unlikely to stage a large rebound, let alone a bull move.

What You Ought To Know About The Oil Price Rebound Google

December 19, 2014December 19, 2014

Why Oil Prices Are Unlikely To Rebound Anytime Soon

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Why Oil Prices Are Unlikely To Rebound Anytime Soon Google

December 2, 2014December 2, 2014

What Economic Warfare Looks Like

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Conspiracy theories aside, it shouldn’t be too difficult to figure out what is going on in the oil market. In addition to underlying economic/market factors, the Obama Administration is now in an all out economic war against Russia. With collapsing oil prices being its weapon of choice.

As you can see from the chart above, there is no hint of a bottom or any sort of a reversal (thus far). How low can oil prices go……$50….$40….$30? No one knows and that’s the problem. As recent OPEC meeting showed, no one is willing to cut production. And while the Russian Economy has been on the receiving end of this deliberate Saudi Arabia/US economic attack, the pendulum is about to swing back.

Bloomberg: The American Oil Boom Won’t Last Long at $65 Per Barrel

The problem is, now that the market forces have taken over, it is impossible to say how low the oil will go. Should oil prices stay below $70 per barrel for any prolonged period of time, the US shale producers will be decimated. Along with tens of thousands of high paying US jobs. It is as simple as that. I guess that would constitute another victory for our clueless ruling class. A sad state of affairs.

What Economic Warfare Looks Like Google

December 28, 2013December 28, 2013

Warning: Camel Business Is Forecasted To Boom In The Middle East

CSM Writes: US to be No. 1 oil producer, but it won’t last

The US will lead the world in oil production for two decades starting in 2015, according to a new report. After that, OPEC will reassert its dominance in oil production.

The US is poised to become the world’s largest oil producer beginning in 2015. But its reign will be fleeting as the Middle East reasserts itself two decades from now.

Why? America’s oil boom won’t last forever, according to an annual outlook released Tuesday by theInternational Energy Agency (IEA). And the technologies that have fueled that North American boom in shale rock formations won’t be easily replicated in the rest of the world.

“The capacity of technologies to unlock new types of resources … and to improve recovery rates in existing fields is pushing up estimates of the amount of oil that remains to be produced,” reads the Paris-based agency’s report. “But this does not mean that the world is on the cusp of a new era of oil abundance.”

Read The Rest Of The Article Here

In a bit of a good news, this is a positive development for the US Economy and the consumer. While this positive development will not have an immediate impact on the financial markets, over the next decade it will be a huge positive for the overall US Economy.

Just as the US will be the clear winner, there will be many losers who rely on the high price of oil to sustain their faltering economies. Most notably, Russia and most of the OPEC members. Going forward, the US should use this 20-30 year window of opportunity to make a massive investment into renewable energy and new technologies to try and completely eliminate oil dependence. I believe it’s possible and if done right should set the US Economy for massive economic growth over the next 30-50 years. At the same time, if such independence is achieved, middle east countries like UAE (Dubai) and Saudi Arabia will face the full force of economic pain.

Even though they have built massive cities and infrastructure I do not see how such cities can be sustained without oil money. I believe it was one of the Sheikhs who said something along the lines of (and I am paraphrasing here ) “Our fathers rode camels, my children and I ride in Mercedes and my grandchildren will ride camels again”. It looks like his wisdom might become a reality.

So, is now a good time to start investing in a Camel Business?

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