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Cyclical or Structural - the Oil Price Debate Continues

Posted September 22, 2016 12:00 AM by Engineering360 eNewsletter

Are oil prices still cyclical, or is there something new going on? As the industry digs itself out of the third largest price decline in 30 years, some analysts are putting the blame on a new series of "structural shocks." If you believe the latter reasoning, the possibility that oil prices will remain low for longer periods is quite high. Fans of cyclic pricing, however, expect an imminent rise. Which team has the upper hand? The Oxford Institute for Energy Studies examined the debate, looking at a range of factors including supply side adjustments, OPEC reactions, and potential demand from China and India.


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Guru

Join Date: Jun 2009
Location: South of Minot North Dakota
Posts: 8378
Good Answers: 775
#1

Re: Cyclical or Structural - the Oil Price Debate Continues

09/23/2016 4:36 PM

I'm not sure but what I see behind it beyond petty politics is the countries who are willing to put forth the most effort to develop their resources tend to set the price.

The middle east has/had easy to reach resources but did not put much effort into expanding their related oil extraction industrial development beyond poke a hole in the sand and let the oil squirt out.

Now their getting hit hard by countries like us in the US who sunk a load of effort and money into developing all new processes that have proven they can pull oil out of the ground fast and cheap in locations and ways the middle east never heard or thought of.

All things considered. Personally I would like the see oil prices go up significantly again. My oil stock sucks and I rather miss my old oilfield fracking job.

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